Pfizer ($PFE) intends to close one of its plants in India, a facility that has sat mostly idle for two years. But it is not as if Pfizer will be short on manufacturing capacity in the country. As soon as it completes its $15 billion deal to buy Hospira ($HSP), it will get that company's massive manufacturing network there, including a brand-spanking-new plant in Vizag.
Pfizer broke the bad news in a filing Wednesday with the Bombay Stock Exchange. It intends to close its plant at Navi Mumbai by September 16, 2015. Pfizer said there has been practically "no production activity at this plant since 2013, and the closure will not impact the supply of any of the Company's medicines to patients."
A Pfizer spokesperson could not be reached. According to LiveMint, about 130 of the 212 workers at the 55-year-old facility took a voluntary retirement offer from Pfizer last year. The remaining 80 have continued to be paid, despite a lack of work and will receive required compensation when they finally are let go.
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| Pfizer CEO Ian Read |
When CEO Ian Read announced Pfizer's $90 a share buyout of Hospira, he said it was attracted by its strength in generics and its place in the biosimilars market. But the New York-based Pfizer also said it expected to squeeze $800 million in annual costs out of the combined company by 2018. It didn't specify how that would be done but given the two companies' extensive manufacturing networks, that would be a logical place to look.
Hospira announced last month that its new 1.1-million-square-foot, $450 million Vizag plant had been signed off on by the FDA and started commercial production. The facility is expected to significantly reduce Hospira's production costs. The Lake Forest, IL-based Hospira has other facilities in India as well, having picked up sterile injectable capacity and then API manufacturing and R&D operations from Orchid Chemicals & Pharmaceuticals in 2010 and 2013.
Pfizer's announcement was the second piece of bad news served up by Big Pharma for India's manufacturing industry in recent days. Last week, Novartis ($NVS) announced that its Sandoz generics unit will close a plant in Turbhe, Maharashtra at the end of 2016 and lay off its 170 employees.
- here's the BSE filing
- read the LiveMint story