Novartis Puerto Rico cut in consumer JV with GSK

When Novartis announced plans to hand off its consumer health operations to a joint venture with GlaxoSmithKline ($GSK), the companies said they figured they could save a boatload of money in "synergies." It looks like a small part of that will come from closing a Novartis ($NVS) plant in Puerto Rico that makes consumer and veterinary products, shedding 270 jobs in the process.

On Friday, the company confirmed an Associated Press report, saying it would whittle operations at Humacao in four phases concluding in early 2019, chipping away at the 270 jobs there along the way. "The decision to close Humacao over time was difficult but necessary to ensure the long-term viability of the business," Novartis spokeswoman Elizabeth Power said in an email.

In addition to the JV with GSK, Novartis' blueprint to get more focused included a $5.4 billion sale of its animal health unit to Eli Lilly ($LLY), which is merging it into its Elanco animal health operations. In turn, Lilly agreed to sell a couple of Novartis products manufactured at the Puerto Rico plant, parasiticides Sentinel Flavor Tabs and Sentinel Spectrum, to French animal health company Virbac.

Power said the Humacao plant will transfer manufacturing and packaging of animal health products Interceptor, Milbemax and Sentinel to Eli Lilly or Virbac. The manufacturing and packaging of Gas-X Thin Strips and the packaging of Transderm Scop will go to a contract operation while the manufacturing of Gas-X soft gels and tablets and Ex-Lax pills and the packaging of Prevacid will be turned over to the Novartis Consumer Health manufacturing plant in Lincoln, NE.

Will more facilities meet the same fate when Novartis and GSK conclude the meshing of their operations? Power said only that the company "continually reviews its manufacturing infrastructure and capacity, including the number and size of its sites, to ensure we have the right production capacity in place to meet market demand, support our products and pipeline, and maximize productivity."

- here's the AP story

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