The fortunes of Roche’s Genentech biologics plant in California, to a large degree, have followed the ebb and flow of the Swiss drugmaker’s expected battle with biosimilars of its blockbuster cancer drugs. Right now, biosimilars are on the rise and the California plant’s fortunes are on a downward slide, with dozens of workers set to lose their jobs.
Genentech today confirmed 130 workers at the plant in Vacaville will be laid off by the end of the year after determining that fewer workers are needed for the demand it is forecasting for its injected medications.
“Following a detailed operational analysis, we have made the difficult decision to eliminate approximately 130 positions at our Vacaville facility by the end of the year. We are making this organizational change in response to current and anticipated production requirements, the volumes required for some of our new medicine formulations, and shift schedule adjustments,” the company said.
Genentech said that workers will get extended healthcare and other help through the transition and that it is “committed to the continued success of our operations in Vacaville, which is our largest manufacturing facility and a vital part of the global Roche network.”
The Vacaville site had one plant that was not quite ready for commercial production when Roche picked it up in its 2009 buyout of Genentech. Figuring it didn’t need the additional biologics capacity at the time, Roche decided to shutter the that cell culture facility before it ever produced a drug. But in 2013, with demand for some of its drugs growing and efforts by some competitors to develop biosimilars stalling, the Swiss drugmaker brought the plant back to life, hiring several hundred workers.
In 2015, with its breast cancer drug Kadcyla in big demand and a long list of other biologics in hand or under development, Roche tagged the Vacaville plant and one in Oceanside, California, for about $285 million worth of expansion. That was part of a bigger biologics blowout, in which Roche said it would invest more than $800 million across facilities in the U.S. and Europe.
Fast forward two years and the the situation has changed again. When the company last month reported Q3 earnings, some analysts saw weakness among top cancer meds that could spell trouble ahead for the drugmaker. Sales of Roche’s top med slid 16% in Europe in Q3, in just its second quarter of facing biosimilar competition there. That performance, which shows how quickly cheaper competition can undercut leading drugs in that market, came after rival Novartis won European approval for its Rituxan biosim in June.
Also coming up quickly are biosimilars from Amgen and Mylan, which this summer won FDA panel recommendations in favor of their biosims to Avastin and Herceptin, respectively. Amgen has since picked up an FDA approval for its Avastin biosim, but Roche is suing for patent infringement, hoping for a win in court that could buy its brand more time.