Looking to streamline its biologics production, AstraZeneca is closing two plants in Colorado and laying off 210 workers stationed there, becoming the latest Big Pharma to plan manufacturing job cuts this week.
The British pharma plans to shutter facilities in Boulder and Longmont, according to a Worker Readjustment and Retraining Notification Act (WARN) notice posted on the Colorado government’s website. AstraZeneca bought those plants from Amgen in separate deals, paying $14.6 million for the Boulder facility in 2015 and $64.5 million for Longmont in 2016.
The shutdowns are part of a global revamp designed to make its biologics supply chain more efficient, a company spokeswoman told FiercePharma. AstraZeneca plans to “consolidate the biologics manufacturing network in one large-scale drug substance facility” in Frederick, Maryland, the spokeswoman said.
“As neither Boulder nor Longmont is currently licensed for commercial operations, there is no need to transfer supply to another manufacturing facility,” she said.
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When AstraZeneca bought the Boulder plants in 2015, it pointed to the fact that 50% of its pipeline was made up of biologics. At the time, AZ figured the newly acquired facility could eventually double its biologics manufacturing capacity in the U.S. But the company never brought the plant online.
The Boulder purchase had followed a $285 million investment in building a biologics plant in Södertälje, Sweden, focused on filling and packaging. It also came about a year after AZ announced plans to plow $200 million into an expansion of its Frederick site.
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But several years into those commitments, AZ’s biologics portfolio has yet to live up to its full potential. In the third quarter, Imfinzi has just picked up some steam as its sales of $187 million beat consensus by 9%. Asthma drug Fasenra is still in its launch phase, and blood cancer therapy Lumoxiti was just approved by the FDA. At the same time, its spending on the Sweden plant has been a drag on profits, executives said during its first-quarter earnings call in May 2018.
AZ, however, isn’t the only Big Pharma company to have closed manufacturing operations in Colorado in recent years. Back in 2017, Novartis said it would close a Sandoz plant in Broomfield, Colorado, over two years. Pricing pressure in its U.S. portfolio was cited as a reason for the discontinuation. Almost at the same time, Pfizer agreed to sell a legacy Hospira API facility in Boulder to CDMO CordenPharma.