Meda drops Recipharm contract; plant may be forced to close

Recipharm, a Swedish contract development manufacturer, said it may be forced to eliminate up to 60 jobs and close one of its plants after Meda, a specialty pharmaceutical group, opted to drop one of its contracts with the company.

Recipharm said it was notified by Meda that it no longer wanted the CDMO handling its penicillin manufacturing. The drug was being manufactured at Recipharm's Strängnäs, Sweden, facility, and accounted for about 2% of revenue, the company said in a press release.

The company's chief executive, Thomas Eldered, said the loss could lead to the closure of the Strängnäs plant, which employs 60 people and is valued at about $1.3 million.

"We have worked hard to explore opportunities to improve the business for both companies," Eldered said in a statement. "Unfortunately our offers have been rejected and they have now decided to transfer this range of products to other manufacturers abroad."

The bad news comes despite a flurry of acquisitions by Rechipharm this year. Early last week, the company announced it agreed to buy Flamel's ($FLML) Pessac, France, facility for €10.6 million ($13.2 million) as part of a plan to expand its manufacturing footprint, as well as invest €10.5 million ($13.1 million) in Flamel stock.

In early November, Recipharm made a €112.3 million ($140 million) cash and stock deal to buy Portuguese contract manufacturer and developer Lusomedicamenta Sociedade Técnica Farmacêutica, and this summer it paid $164.5 million to buy Milan-based Corvette Pharmaceutical Services Group from the Italian private equity Group LBO Italia Investimenti.

- check out the release (PDF)