Ireland's liberal tax code continues to attract drugmakers that want to put up a new facility and reap some of those low-tax benefits. But some of the long-term players are cutting back on their extensive manufacturing there. Bristol-Myers Squibb ($BMY), with plans to lay off about 160 workers at two facilities, can now be added to that list.
The New York-based drugmaker gave the bad news to workers there last week, saying it will close down an active pharmaceutical ingredient (API) plant at Cruiserath in North County Dublin and lay off the 130 employees who work there by the end of next year. It will also eliminate one manufacturing line at an API plant in Swords County, eliminating 30 of the 320 employees there, also by the end of 2015. The company said in a statement that it needs to close the 10-year-old Cruiserath facility because of "changing market demand" for some of the products made there. A BMS spokesman declined to specify which products those were, but the BMS website says the plant makes APIs for hypertension, HIV and diabetes medicines. In December, the company sold its share of a 6-year-old diabetes partnership with AstraZeneca ($AZN) for $4.1 billion.
Susan Hynes, BMS general manager of API operations in Ireland, said the company is still committed to the country and is working with development officials there to see if there might be another use for the Cruiserath plant. She said BMS "will endeavor to minimize job losses in Ireland."
Merck ($MRK) said essentially the same thing in December when it announced it would close a women's healthcare production plant in Swords by the end of 2017. Merck employs 570 people at the site but will trim its headcount by 130 over the next 6 months. Once these cuts are made, Merck will gradually phase out its operations at Swords before closing the plant in 2017. News that Merck is exiting the Swords plant comes 8 months after it outlined plans to close its facility in Wicklow County.
But not all the recent announcements about production in Ireland have sounded so dire. Tarrytown, NY-based Regeneron ($REGN) is investing $300 million to convert a former Dell computer plant in Limerick into a manufacturing facility, in part to get tax benefits. That project is slated to be complete by the end of 2016, at which point it expects to have 300 people working there. But Ireland's finance minister Michael Noonan said recently that Regeneron execs told him in meetings they are already thinking about adding a second phase of construction as well as planning for a new fill-finish facility near the new plant. All told, those additions could add another 400 to 500 jobs, he said.
Alexion ($ALXN), maker of orphan drug Soliris, established a supply-chain and logistics operation in Dublin with 50 people last year. Now the drugmaker is buying a vial-filling facility there and moving some assets to the country to net the tax benefits it offers.
- here's the BMS statement