Bayer manufacturing takes big hit in restructuring

Bayer logo and dark clouds
Bayer is cutting manufacturing jobs as part of a bigger restructuring. (Bayer)

Several years back, Bayer Healthcare was feeling so good about the future of its hemophilia treatments that it announced plans to invest $700 million in two plants in Germany and hire 500 workers by 2020. Fast-forward four years, and one of those plants will be now be closed and hundreds of workers there let go.

Bayer last week announced it will close its hemophilia manufacturing facility in Wuppertal, Germany, and lay off 350 workers. It will now focus all of its recombinant factor VIII production at its site in Berkeley, California. The cuts in Germany come on top of the announced layoffs in October of more than 225 manufacturing workers in Berkeley.

The reversal for Wuppertal is part of a much larger reorganization in which Bayer will shed its animal health unit, get rid of the Coppertone and Dr. Scholl’s consumer lines and let go 12,000 employees, many in its home country.The German conglomerate said in a statement that the moves were made “to enhance productivity and innovation while significantly improving competitiveness.”

The shake-up comes as Bayer's stock has been battered by its ill-fated buyout of crop science competitor Monsanto. All told, Bayer expects annual savings of €2.6 billion from 2022 after the gigantic revamp and the synergies from the Monsanto acquisition.

RELATED: Bayer expands German plants as it preps for new hemophilia treatments

The body blow to its hemophilia production also comes as Bayer’s franchise of hemophilia treatments, which includes older factor VIII treatments Kogenate and Kovaltry and newer entrant Jivi, has been pressured by Roche’s newcomer Hemlibra. During the first nine months of 2018, sales of the Bayer drugs combined plummeted 10.9% on a currency-adjusted basis.

Bayer gave a hint of what it intended for its hemophilia production in October when it announced that it would cut several hundred jobs at its Berkeley, California production site, even as it was launching Jivi, a hemophilia treatment that can been taken weekly instead of every day or two.

RELATED: As Jivi launches, Bayer cuts 227 workers at U.S. plant that produces hemophilia treatment

"This site is responsible for producing all three of Bayer’s rFVIII therapies, including Jivi, which was recently approved in the U.S. and Japan," Bayer said in an emailed statement at the time. "Our transition into commercial production with three products has resulted in the need for organizational changes to enable these efficiencies, and today we notified 227 employees that their positions were being eliminated as part of this reorganization."

Undoubtedly, those terminated workers were hopeful about the news that Berkeley will absorb production from Bayer’s Wuppertal site, but a Bayer spokeswoman said the news will not affect those layoffs.

“We don’t anticipate that this decision will shift jobs to Berkeley,” she said in an email.