Wockhardt looks to trim $12M by restructuring US business, shuttering Illinois plant

Wockhardt plans to trim $12 million in annual expenses by restructuring its U.S. business and shuttering its Morton Grove, Illinois, manufacturing facility.

As part of the U.S. restructuring, the company is tapping third-party contract manufacturers to produce some of its high-margin products. 

In a slide presentation (PDF) filed with the Bombay Stock Exchange, the company said it will continue to “maintain sales with 40% gross margins.” Additionally, the company said it will remain focused on growing its novel antibiotics market share and that its operations in the U.K. will continue to expand.

Meanwhile, as part of a vaccine manufacturing deal with the Serum Institute of India, the company has received a £10 million ($12 million) “contribution” for reserving production capacity of 150 million doses over 15 years. The company will help manufacture Serum vaccines at a fill-finish facility currently under construction in Wrexham, North Wales.

Under that deal, the Serum Institute has already identified two vaccines of interest, Wockhardt said. Pending regulatory approvals, Wockhardt plans to begin batch production in the next 8 to 12 months at the new facility.

Last August, as part of a consent decree (PDF) with the U.S. Department of Justice, Wockhardt said it would discontinue all manufacturing, processing and drug distribution from the Morton Grove site.

That news came in the wake of a suit filed against the facility and the company’s vice president of business development, Gopalakrishnan Venkatesan, in early August.

In its suit, the DOJ alleged the syrups and nasal sprays produced at the facility were not made in compliance with good manufacturing standards. During the course of five inspections of the facility by the FDA between 20210 and 2021, the company was cited for shortcomings such as lack of controls and improper cleaning or sterilization of utensils.