Novartis is shutting down Colorado plant, laying off 400 employees after overestimating gene therapy demand

Just 14 months after opening an ambitious gene therapy manufacturing facility in Longmont, Colorado, Novartis is closing up shop there.

Novartis will close the plant, 35 miles north of Denver, by July 9 and lay off about 400 employees. The six-building, 692,000 square foot complex employed scientists, engineers, analysts and manufacturing and operations personnel. 

The facility opened primarily to produce Zolgensma, Novartis’ gene therapy to treat newborns with spinal muscular atrophy. But the company's abrupt move to close the site is evidence that Novartis might have overestimated the demand.

Further, a spokesman said the company has made "process improvements" that will enable it to operate fewer gene therapy sites in the long run.

“At the time we acquired the Longmont facility, we anticipated that we would require all three sites to meet the needs of our business,” a company spokesman wrote in an email. “Based on the evolving dynamics of the gene therapy landscape and progress we’ve made with process improvements, we now know that we can fulfill our long-term demand, including patients who may benefit from our next wave of gene therapies, with two commercial sites.” 

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The Longmont site was Novartis' third gene therapy manufacturing facility in the U.S. and the second to come online in the last two years. Its subsidiary AveXis, which has been renamed Novartis Gene Therapies, announced in 2018 a $55 million investment for a new plant in Durham, North Carolina. A year later, it decided to pour $60 million more into the site. The subsidiary already had a similar plant in Libertyville, Illinois.

Novartis acquired the Longmont facility from AstraZeneca in 2019 for $30 million. The company had it up and running less than a year later thanks in large part to the roughly 150 employees who stayed on through the transfer. But just as quickly as it scaled up, the plant now is scaling down. 

"We will now focus on meeting the needs of patients through our Libertyville and North Carolina sites, where we will continue to invest in next-generation processes," the spokesperson said. "We anticipate filing for commercial licensure in North Carolina later this year and ultimately both of these sites will share responsibility for Zolgensma production." 

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With a $2.1 million price tag for its single IV dose, Novartis' Zolgensma is the most expensive drug in the world. The drug generated $920 million in sales last year.