Merck to build biologics research facility in New Jersey where plant will close

Merck ($MRK) says it will shutter another plant as it continues to suffer from the patent loss of blockbuster Singulair, but it intends to build up a research facility at the site in Kenilworth, NJ, to work on biologics.

The company has sent notices to 113 employees who will be let go when the plant closes in October. Workers were not surprised by the news. The drugmaker put the plant in Kenilworth on the hit list a couple years ago as it began consolidating facilities after its 2009, $41 billion buyout of Schering-Plough, according to It will move what manufacturing remains to a plant in Cleveland, TN, spokeswoman Lainie Keller told the publication.

"Since we merged with Schering-Plough, this has been part of our operations to consolidate manufacturing around the world," Keller said. In February, Merck said it would close a plant in Ireland and lay off 280 workers there.

The news comes as Merck this week reported that its earnings were off 50% in the quarter as its allergy drug Singulair saw sales drop 80% compared with the same quarter a year ago. Improvements in sales of diabetes drug Januvia weren't enough to offset the crumbling Singulair revenues. All of this led to Merck again downsizing expectations for 2013 earnings. It now forecasts earnings to be off 5% to 6% for the year. Earlier Merck said they would be flat, then revised that to down 3% to 4%.

Keller told that Merck intends to build up the research facility at the 100-acre campus at Kenilworth into an "important" facility focused on biologics. Merck has had to rethink some of its strategies around biologics and biosimilars. Last year it said it was dropping its biosimilar development program for Enbrel after Amgen ($AMGN) managed to secure a longer patent for the drug. In February, Merck said it would partner with a new venture formed by the South Korean conglomerate Samsung and Biogen Idec ($BIIB) for work on biosimilars.

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