GlaxoSmithKline to shut down antibiotics production, cut 300 jobs in wake of Novartis buyout

GlaxoSmithKline plans to shut down antibiotics production in the U.K. after wrapping up a $500 million product sale to Novartis’ Sandoz.

GSK will finish out its supply commitment to Sandoz—a deal that lasts through 2025—as it prepares to shutter one site and downsize another, cutting 300 jobs in the process, the company said Friday.

The British drugmaker agreed this week to sell rights to three antibiotic brands—Zinnat, Zinacef and Fortum—to Novartis' generics unit. While Zinacef and Fortum are made by ACS Dobfar in Verona, Italy, GSK expects to manufacture Zinnat itself through 2025.

Zinnat is made at GSK U.K. sites in Ulverston in Cumbria and Barnard Castle in County Durham, GSK said. Ulverston will shut down completely, but Barnard Castle will continue manufacturing other GSK prodcuts. Ulverston's 130 employees and 170 in Barnard Castle's Zinnat business will lose their jobs. 

RELATED: Novartis' Sandoz doubles down on antibiotics with $500M deal for GSK brands

“Our cephalosporin team undertakes highly skilled and specialized work,” GSK said in a statement to Fierce Pharma. “However, looking ahead in GSK, there will be reduced emphasis on the medicines currently produced by the Zinnat Supply Chain in Ulverston and Barnard Castle."

GSK is backing away from these older antibiotics as it focuses in on vaccines and specialty drugs, including "innovative antibiotics," the company said.

Meanwhile, the company is keeping popular anti-infective drug Augmentin and will continue developing new antibiotic candidates. It is also a member of an antibiotic-focused pharma consortium called the AMR Action Fund, which launched last year with $1 billion in funding.

RELATED: Big Pharma joins forces on $1B fund to shore up struggling antibiotics makers

GSK and Novartis are both members along with others including Pfizer, Johnson & Johnson and Merck. At least partly inspired by the COVID-19 pandemic, the fund aims to push two to four new antibiotics to market by 2030 by offering financial backing and technical expertise to young biotechs.

The intent is “to sustain an antibiotic pipeline that is on the verge of collapse," Eli Lilly CEO David Ricks said at the time of the launch.

Indeed, the COVID-19 pandemic has reignited interest in infectious diseases and served as a stark reminder—via antibiotic supply chain disruptions from China, for instance—that the Western world is still ill-prepared when it comes to antibiotic development and production.