Shire closing US plant as it begins to assess post-Baxalta manufacturing footprint
In June this year, Shire completed the $32bn acquisition of Baxalta, and while it has already begun trimming non-core business opportunities - its biosimilars programmes, a gene therapy candidate and a kinase inhibitor deal with CTI Biopharma - the inflated manufacturing has remained untouched.
But during a conference call this week discussing Q3 results, CEO Flemming Ornskov revealed Shire has made the decision to cease operations at a plasma fractionating facility at a Los Angeles manufacturing site, the first part of a “network strategy [which] will be laid out next year.”
Spokeswoman Katie Joyce confirmed to this publication manufacturing operations in one building in Los Angeles will end by December, with production transitioned “to newer manufacturing facilities on the same campus and other sites within our manufacturing network.”
She added the closure was “part of a previous commitment made to the city of Los Angeles and ongoing efforts to improve our operations.”
17 sites and growing
According to the pre-acquired Baxalta’s annual report, the company manufactured products at 13 sites globally, with a new immunoglobin and other plasma-based therapy manufacturing facility in Covington, Georgia set to open in 2018.
Shire, meanwhile, has sites in California, Massachusetts, Austria, and Italy, and began constructing a $400m biologics facility in County Meath, Ireland earlier this year.
And during the conference call, Ornskov rebuked claims that Shire was unable to manage the firm’s enlarged manufacturing footprint.
“I heard that people were very worried when we did the deal about, wow, can Shire really manage such a complex manufacturing organization with 17 manufacturing sites in seven countries?” he told stakeholder.
“Well, not only can we do that, we're on track to starting a new manufacturing site in Ireland which we're very excited about.”
Peter Welford, an equity analyst at Jefferies International, also thought Shire would cope with the inflated network and further closures are unlikely in the short-term.
“Personally I feel the manufacturing network is probably required for the plasma business, at least until the large Covington site comes online in 2018,” he told Biopharma-Reporter.com.
“I suspect that too many further closures beyond the LA facility announced would probably start eroding the sales line.”