Lonza's pharma unit sales suffer as it closes U.S. biologics plant

Swiss drug ingredient and chemical maker Lonza continues to struggle as it moves through a reorganization that CEO Richard Ridinger calls the most significant in 15 years. The company reorganized its drug ingredient and custom pharma manufacturing units as part of that process, and is closing a U.S. plant to reduce costs, but so far the move has resulted in lower sales in pharma.

The company reported Thursday that sales across all of its units fell 4.2% to CHF 3.6 billion ($3.9 billion). A big part of that hit came from its water-treatment chemicals unit, according to Bloomberg. The combined pharma and biotech segment had sales of CHF 1.426 billion ($1.579 billion) last year, down 7.9%, which the company said was in part due to its decision to close down a biologics plant in Hopkinton, MA, and move that production to its facility in Visp, Switzerland. About 250 people are being let go in the process.

The Hopkinton facility has struggled with FDA issues since at least 2011, when it received an FDA warning letter, focused on failed batches of an API manufactured for Ontak, a cancer drug from Japanese drugmaker Eisai. Last year, French drugmaker Ipsen ($IPN) reported supply issues tied to the plant, telling customers to expect shortages of its orphan drug Increlex.

Lonza said today that most of the customers for the plant in Massachusetts have found alternative suppliers. "The majority of these transfers were carried out successfully in the second half of the year, and the phasedown of the Hopkinton facility is on track." It said it is working with regulators to ensure product supplies until the transfer is complete. The shutdown has cut into sales, however, as contracts expired and were not renewed, it said.

- here's the announcement
- more from Bloomberg

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