August 26, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Late last week, GlaxoSmithKline announced that it had reevaluated its manufacturing network and would not be selling off its manufacturing facility in Memphis, Tenn.
The company indicated it will invest approximately $2 million into infrastructure improvements at the site. The facility at 2149 Harbor on Presidents Island manufactures Polident and other commercial products. Polident is sold outside the U.S. under the name Corega.
“The GSK Memphis, Tenn., manufacturing site continues to be an important part of GSK’s manufacturing network, supply products in North America as well as other parts of the world,” said company spokeswoman Deborah Bold to The Commercial Appeal. “GSK continuously evaluates its network of manufacturing facilities to ensure it is efficient and meets the needs of business and, ultimately, the consumers at the end of our supply chain who rely upon our products.”
GSK originally announced in 2011 that it intended to sell the operation in Memphis, which employed 250 people at the facility. A short time later, GSK sold several of its over-the-counter and consumer brands to Prestige. Included in that sale were BC, Goody’s, Stanback headache powder, and Chap-Et lip balm.
The company indicates the improvements to the Memphis location will not involve additional jobs. However, earlier this month the company reported it was hiring more than 100 people at its manufacturing facility in Zebulon, North Carolina. That location employs 850 people, including 700 site staff and support groups. It manufactures a variety of tablets for Imitrex, Epivir, Combivir, Wellbutrin SR/Zyban, as well as inhalers for Ventolin, Flovent, Advair and Breo.
That announcement is slightly puzzling, because in March of this year the company filed a Worker Adjustment and Retraining Notification (WARN) with the North Carolina Department of Commerce indicating it was laying off 180 people in North Carolina.
The company’s worldwide restructuring has resulted in a number of layoffs at various locations. In March it indicated it was laying off 150 people in Philadelphia. Earlier in March it announced 135 people were laid off in China, which followed a January announcement it was laying off about 1,000 workers in China.
All of this restructuring is intended to save more than $1.6 billion in annual costs over a three-year period. The three prongs of the restructuring is diversification of its global business, delivery of more products of value, and simplifying its operating model.
GSK is struggling with declining sales of its blockbuster asthma medication, Advair. In 2013, Advair had $5.3 billion in sales. Analysts project this year’s sales will drop by 30 percent. The company’s 2014 third-quarter earnings showed a net income plunge of 62 percent and a 13 percent drop in global sales. It was also rocked by a bribery scandal in China that resulted in $500 million in fines, as well as criminal charges for GSK’s China general manager Mark Reilly and four other company managers.
On February 17, 2015, GSK announced that Deirdre Connelly, then president of its U.S. pharma operations, would retire and be replaced by Jack Bailey. Bailey was at that time senior vice president for policy, payers and vaccines. Bailey is in charge of the restructuring initiative in the U.S., which started with up to 900 job cuts at its Research Triangle Park, N.C. research and development campus.
