Roche to shut down 4 facilities to restructure production capabilities

In order to optimally utilise its manufacturing network, Swiss pharma giant Roche on November 12, 2015 decided to stop production at its four manufacturing sites in Clarecastle (Ireland); Leganes (Spain); Segrate (Italy); and Florence (US). In an effort to minimise job reductions, the company is actively looking into divestment opportunities for these facilities.
 
The shutdown has been triggered by Roche’s plans to restructure its manufacturing network for small molecules to address current underutilisation as a result of its evolving portfolio. A new generation of specialised medicines based on small molecules requires novel manufacturing technologies and will be produced in lower volumes than traditional medicines. As a result, Roche plans to exit four manufacturing sites.
   
In order to manufacture a new generation of specialised medicines based on small molecules, Roche will further invest Swiss Francs 300 million (about $ 296 million) into a dedicated facility in Kaiseraugst, Switzerland to support future technology requirements. This investment will strengthen the company’s development and launch capabilities.
 
“With these changes we are responding to the evolution of our small molecule portfolio towards specialised medicines produced in lower volumes. We are aware of the impact this decision has on our colleagues, and we will do our utmost to support them during this transition,” said Daniel O’Day, chief operating officer, pharmaceuticals division of Roche
 
It is expected that site exits will result in non-core restructuring costs of CHF 1.6 billion until 2021, of which up to CHF 600 million will be in cash. This also includes additional efficiency efforts undertaken in the manufacturing network and organisation. Estimated non-core costs in 2015 are up to CHF 800 million, with only a minor cash flow impact in 2015.
 
Roche continuously assesses and adapts its manufacturing capacities and technologies. To address the growing demand and rich pipeline of medicines across several therapeutic areas, the company has announced investments of over CHF 2 billion in its biologics manufacturing capacity over the past two years.