Omega gets German plant as part of OTC deal with GSK

Omega Pharma will get GlaxoSmithKline's ($GSK) manufacturing plant in Herrenberg, Germany, as part of the $612 million acquisition of GSK's over-the-counter healthcare brands in Europe.

Production problems at a Roche ($RHHBY) plant, however, are forcing GSK to hold on to its weight-loss pill Alli for now, the company said today. The Swiss company manufactures the active ingredient, orlistat, which it uses in its prescription-only weight drug, Xenical, Reuters reports. Alli is a low-dose version of Xenical.

Alli racked up sales of €93 million in 2011. A GSK spokesperson said the supply problems were production related, not tied to safety issues, and the company is working with Roche to fix them, according to Reuters.

Belgium's Omega was earlier identified as one of the companies after GSK's European OTC product line, which includes painkiller Solpadeine, Zantac for stomach acid, and hay fever spray Beconase, among others. A number of the products being sold to Omega are manufactured at the German plant, according to a GSK statement. It said the 110 employees of the production facility are expected to transfer to Omega "under the provisions of German employment law."

The company did not say what will happen at its other manufacturing facilities that produce its OTC products. Last year, it cut jobs at a plant in Waterford, Ireland, and moved some of those positions to a production facility in Spain.

GSK last year announced its plans to divest itself of consumer products and in December announced the sale of its North American OTC products to Prestige Brands Holdings ($PBH) for $660 million.

- read the Reuters piece
- here's the company statement