Pharmaceutical giant Novartis AG (ADR)(NYSE:NVS) has announced that its Sandoz facility located in Broomfield will be shut down over a phased period. The Switzerland-based company manufactures generic drugs at the facility which has been at its current location for more than four decades. According to a spokesperson for the firm, 450 jobs will be lost in the two-year period.
After closing the facility production will be moved to a Novartis plant that is located in the state of North Carolina.
“While this was a strategic choice made to optimize our manufacturing infrastructure, it was a very difficult decision as the closure affects approximately 450 employees at the Broomfield site,” a statement from Novartis said.
Double-digit price declines
According to Novartis customer consolidation and increased competition has resulted in some generic drugs recording double-digit price declines in the United States. Last year revenues generated by Sandoz in generic drug sales reached $3.7 billion in the U.S. compared to a figure of $10.1 billion across the globe. Compared to sales figures from 2015, growth was flat. Products manufactured by Sandoz are used by patients numbering 500 million. The largest decline was recorded in the category of drugs used to fight infectious diseases.
Currently Novartis has 24 locations in the United States where it employs a combined workforce of over 23,000 people. Around the world Novartis has an employee base of 119,000 and it has a presence in 155 countries.
This comes in the wake of Novartis reconsidering its stake in Roche and which was valued at $14 billion. According to the chairman of the pharmaceutical giant, Joerg Reinhardt, after mulling the decision to sell the company had decided it was in its best interests to hold on to the stake.
In the last three years Novartis had disposed of a couple of its assets. This includes vaccines which it sold to GlaxoSmithKline plc (ADR)(NYSE:GSK) and a flu-shot stable which it sold to Seqirus. It also sold its animal health unit to Eli Lilly and Co (NYSE:LLY).
In Monday’s trading session shares of Novartis rose by 0.28% to close the day at $86.37 per share.