After failing to sell its animal health production facility in St. Joseph, MO, Bayer HealthCare confirmed on Tuesday that it would close the site. Bayer has owned the facility since 2012, when it laid out $145 million for Teva's ($TEVA) animal health unit. The company plans to shift the DVM and Expert Care lines that are manufactured there to other plants, discontinue some products, and lay off 130 people.
Bayer said in February that it planned to sell the site. But in a statement obtained by the Kansas City Star, the company said a changing market had left it with excess capacity.
Just what this move means for Bayer's future in animal health is unclear. CEO Marijn Dekkers had expressed a desire to prioritize veterinary products, citing animal health as a promising growth opportunity. At one point, analysts were even buzzing that Bayer might acquire animal health giant Zoetis ($ZTS), which has been under pressure from activist hedge fund investor William Ackman to put itself up for sale.
And Bayer has been investing in some new products. Late last year, for example, it launched BCS Cowdition, a smartphone app that dairy farmers can use to track herd health.
The plant closing is certainly a loss for St. Joseph, which is considered a major hub of the Kansas City Animal Health Corridor. More than 300 animal health companies are located in that area, which spans from Columbia, MO, to Manhattan, KS.
State officials had offered Bayer incentives to keep the plant open, but the company never pursued them, according to Patt Lilly, CEO of the St. Joseph Chamber of Commerce. "We offered good support for the company," Lilly told the Star. "They were hopeful initially that their products might grow in a way that would allow for additional manufacturing here, but apparently that did not work out."
- here's the Kansas City Star story
- get FiercePharmaManufacturing's take