GlaxoSmithKline to hold on to its antibiotics business, but nearly 200 workers will go

GlaxoSmithKline is cutting sterile manufacturing jobs at its site in Ulverston, U.K. (GlaxoSmithKline)

It has been a tough rollercoaster ride for GlaxoSmithKline’s U.K. manufacturing site in Ulverston. Once slated to get a major biologics plant with hundreds of new jobs, GSK is now closing a part of the plant and laying off nearly 200 workers.

The cuts come as GSK has decided to keep its cephalosporin antibiotics business but reorganize it to be more efficient.

“Following a review of our cephalosporins antibiotics business announced last year, we have decided to retain this business, which continues to grow strongly, and redesign the supply chain to improve efficiency and reliability,” the company said in an emailed statement today.

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GSK said most of its cephalosporins business involves making tablets, which will continue to be made at its Ulverston and Barnard Castle factories. It is, however, phasing out production of it API production for sterile injections, which is done at Ulverston in Northwest England, cutting 191 jobs in the process over the next two years. About 150 workers will be kept.

Friday, GSK said availability of the products currently made at Ulverston will be unaffected by the changes we are setting out today. It also emphasized that, "Neither the review nor the steps we are setting out today are related to the U.K.’s decision to leave the European Union."

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It is quite a reversal from 2012 when GSK made a big deal about its decision to invest about £350 million ($458 million) to build a new large-molecule plant in Ulverston after Parliament enacted tax reforms benefiting large manufacturers. It was supposed to be the first new GSK manufacturing facility to be built in the U.K. in almost 40 years, and was slated to add up to 500 jobs when it was finished.

But after taking over as CEO last year, Emma Walmsley reversed that decision and also decided to sell GSK's cephalosporin antibiotics business and the plants where those products are made as part of efforts to streamline GSK manufacturing.That business includes its Zinnat/Ceftin, Zinacef and Fortum brands, which are produced in part of its Barnard Castle site, in Verona, Italy, as well as at Ulverston in Cumbria. 

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While the latest reversal will save the Ulverston and Barnard Castle production, the plant in Italy does not figure into the business going forward. Glaxo intends to sell it and make Verona a contract manufacturing organization (CMO) that would continue to supply GSK. 

"We have already engaged with potential buyers of the site. In this scenario, the existing workforce would be expected to transfer to a new owner," a spokesperson said in an email.