October 31, 2014
By Mark Terry, BioSpace.com Breaking News Staff
Basel, Switzerland-based Novartis announced yesterday that it is cutting 75 jobs at its facility near Lincoln, Neb. The plant, part of Novartis Consumer Health, has been restructuring and this current round of layoffs is the third since May 2013.
In May of last year the company laid off 72 people and restructured in order to eliminate 41 open positions. In January 2014 Novartis cut 27 jobs and eliminated 58 open jobs.
The Lincoln facility produced solid dose and powder forms of over-the-counter drugs like Theraflu and Excedrin. Some of the restructuring is related to 2011 inspections by the FDA in response to customer complaints. The inspections found significant quality control problems. Prior to December 2011 the Lincoln factory manufactured most of Novartis’s OTC medications. As part of the restructuring they only manufacture Theraflu and Excedrin.
The new cuts will lay off 44 workers and eliminate 31 open positions. After these cuts, about 500 employees will remain at the Lincoln facility.
In September of this year Novartis informed New York’s Department of Labor that it would lay off 83 workers at its Suffern, N.Y. facility. The company plans to close that facility over two to three years, with the doors shuttering for good in 2016. A total of 525 employees will lose their jobs, although some will transfer to other Novartis locations.
The New York facility manufactured Diovan (valsartan), a drug for blood pressure. The patent for Diovan expired in 2012. India’s Ranbaxy Laboratories bought the exclusive rights to manufacture and sell Diovan for the first six months of the generic period.
Novartis also indicated today it is leasing an 80,000 square foot building in King of Prussia, Pa., which potentially is part of a partnership with the University of Pennsylvania. In September the university partnered with Novartis to build a new Center for Advanced Cellular Therapeutics (CACT) on in medical campus in Philadelphia. The center is expected to create about 100 jobs.
The company posted its third quarter results this week, indicating that the sale of part of its U.S. divisions were the source of a 44 percent increase in earnings. Sales rose 4 percent to $14.7 billion. The company also benefited from sales of its Cambridge, Mass.-based Idenix Pharmaceuticals Inc. earlier this year to Merck & Co. This generated $800 million in pretax earnings.
Although sales were a little flat in the pharmaceutical unit, it still shows growth. Novartis indicated that products that were launched in 2009 or since then, or that have exclusivity until 2018, created $3.5 billion in sales. These include products such as Gilenya, for multiple sclerosis, and Tasigna, for leukemia.
