Merck closing Cherokee fermentation operations

So far unable to sell off the contract fermentation operations at a Cherokee Pharmaceuticals plant in Pennsylvania, Merck ($MRK) has decided to shut them down.

About 30 workers will lose their jobs as the company discontinues contract fermentation in September. Currently, the plant employees about 380 at the Riverside complex, Merck spokesman Ron Rogers tells The Daily Item. He says production of its antibiotic products, Primaxin and Invanz, is unaffected by the move.

In 2010, Merck bought back the Cherokee plant it had sold off to contract manufacturer PRWT in 2008. PRWT was struggling, and Merck needed to safeguard its supply of active ingredients and other products still made at the plant. Merck said last year that it intended to sell the contract fermentation operations as part of an effort to cut headcount internationally. It also said at the time that it was farming out production of APIs for a cholesterol drug and an AIDS treatment.

The company last year asked for a rezoning near the plant that it said would help it sell the operation and in March a company official told borough officials it was in talks with a small company to buy it. But Rogers tells The Daily Item now that no sale has been reached and he can't say if one will.

While Merck is divesting itself of the contract fermentation operation, some companies are expanding in that area. Boehringer Ingelheim in March announced that it would invest €17 million ($21.1 million) expanding plants in Europe, including its fermentation operations in Biberach, Germany.

- see The Daily Item's story

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