Merck unloads second EU plant as downsizing marches on

The LaVallée site--Courtesy of Fareva

For the second time in two months, Merck & Co. ($MRK) has unloaded an API plant in Europe. This time it is a plant in France that it has sold to Luxembourg-based contract manufacturer Fareva.

Merck recently acknowledged it had a deal to sell the La Vallée manufacturing site in Saint-Germain-Laprade but wouldn't name the buyer. Fareva announced this week that it had acquired the API facility and was taking on its 130 workers. The company said adding the facility's 128,000-liter capacity would nearly double its current API capacity at plants in Germany and France.

Fareva didn't disclose what it paid for the site but did say it would invest about €25 million ($28 million) to add a high-containment facility with two separated compartments with 4,000-liter reactors and high-containment dryers. That work is slated to be done by mid-2017.

Merck, known as MSD outside of the U.S., sold a plant in Pavia, Italy, to Istituto Biochimico Nazionale Savio in July. That price was also kept under wraps, but IBN took on the 148 employees at the facility and was awarded a 5-year contract to continue to manufacture products for Merck.

The Whitehouse Station, NJ-based pharma company has been regularly shedding plants for the past 5 years after its 2009 merger with Schering-Plough tripled its production network to about 90 facilities. In its most recent update on job cuts since that merger, the company said it expected to trim about 2,500 more positions from its manufacturing operations in the next two years.

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