Bayer Cutting More Than 200 Jobs in San Francisco Bay Area
The company recently created a drug manufacturing facility in Germany. The company recently had a hemophilia A drug approved in the U.S. and Japan called Jivi. The Berkeley site produced all three of Bayer’s rFVIII therapies for hemophilia, including Jivi. Jivi is a rFVIII replacement therapy intended to stop or prevent bleeding. It has an extended half-life by using proven PEG technology.
A Bayer spokesperson, Nora Davis, told BioSpace, “Bayer’s facility in Berkeley will continue to produce all three of our rFVIII therapies, including Jivi—that will not change following yesterday’s announcements. While Bayer is in the process of developing a new production facility in Germany, the facility isn’t expected to come online until late 2021. The organizational changes in Berkeley are primarily driven by the need to enable manufacturing efficiencies at this site that are necessary to remain competitive. Once online, the new facility in Germany is designed to expand our rFVIII production capabilities.”
Although the company’s Kogenate for hemophilia A has been on the market for more than 25 years, it will continue as, Davis says, “an important part of our portfolio in the U.S. and other markets around the world, and will continue to be available for several years.” However, in some countries the drug is being phased out as the next-generation therapies, Kovaltry and Jivi, are brought on.
The company stated, “The manufacturing processes for these products must also be robust and efficient to ensure product safety, reliable supply, and to remain competitive in support of new therapies that position the long-term viability of the site. Our transition into commercial production with three products has resulted in the need for organizational changes to enable these efficiencies, and today we notified 227 employees that their positions were being eliminated as part of this reorganization.”
The official separation date for the layoffs is December 3. After that period, separation benefits become effective. All employees affected are eligible for separation benefits and outplacement services, although the specifics of the plans vary from salaries and union-represented staffers.
Earlier this year, Bayer cut 200 jobs via voluntary buyouts in preparation for its changing hemophilia strategy.
Bayer wrapped a major merger in June with St. Louis, Missouri-based Monsanto. At the end of May, the U.S. Justice Department approved the merger after Monsanto agreed to sell about $9 billion in assets. A Bayer spokesman at the time indicated that European regulators were requiring the sale of $2.54 billion in assets, which were being sold to BASF, which were not materially different than what the U.S. DOJ was demanding.
In September, Bloomberg wrote, “Closing the deal required nearly two years of wrangling with regulators. Bayer filed some 40 million pages of paperwork, eventually agreeing to sell 7.6 billion euros ($8.8 billion) in agriculture assets—including its vegetable-seeds business—to German competitor BASF SE to placate antitrust authorities. The delays pushed the deal to June. Monsanto’s sales in the second quarter of 2017 were $5.07 billion, compared with $2.69 billion in the fourth quarter.”
And shortly after, in August, the newly merged companies lost a lawsuit in California to former school groundskeeper, Dewayne Johnson, who alleged that exposure to Monsanto’s Roundup and Ranger Pro weed killers caused his non-Hodgkin’s lymphoma. The jury awarded him $289 million.
Monsanto faces more than 5,000 similar lawsuits related to cancer risks and its glyphosate-based weedkiller, which includes Roundup. Bayer, which has dropped the Monsanto name, indicates it will appeal the decision.
But Alistair Campbell, an analyst with Bernberg, believes that resolving these issues will cost Bayer about $5 billion, based on past product liability settlements, including Merck & Co.’s $4.9 billion settlement over Vioxx, a painkiller, and Bayer’s settlement over Baycol, for cholesterol. In that case, Bayer paid $4.2 billion in total settlement costs.