- Viatris, the generic drug company created through Mylan's merger with Pfizer's Upjohn unit, said Friday it plans to close or divest up to 15 manufacturing plants worldwide as part of a major cutback that could impact as many as 9,000 employees.
- Among the plants being shuttered is a sprawling, former Mylan factory in Morgantown, West Virginia that produces pills and tablets. Operations will close down by mid-2021, a company spokesperson confirmed to BioPharma Dive, noting that "a majority of employees impacted" will remain working until then.
- Viatris will keep open, however, a research and development center in Morgantown, the spokesperson said. Other facilities being closed, sold or downsized include "oral solid dose" plants in Baldoyle, Ireland and Caguas, Puerto Rico, as well as two drug ingredient facilities in India.
Mylan agreed to merge with Pfizer's generic drug unit Upjohn in mid-2019, a combination that created a global conglomerate with 45,000 employees and major centers in Pittsburgh, Shanghai and Hyderabad, India.
The deal, under which Pfizer investors owned more than half of the combined company, was the result of a strategic review by Mylan, which had suffered through a years-long stretch of business and public relations setbacks.
Regulators cleared the deal on Oct. 30, and Viatris began trading on Nasdaq on Nov. 17 with a pledge from executives to cut $1 billion in costs over the next four years.
Viatris has now filled in the details of that restructuring, which will dramatically scale back the company's footprint. Up to 20% of Viatris' workforce will be affected, although it's not clear how many would be laid off or transferred to other companies through plant divestitures.
In addition to the sites in West Virginia, Puerto Rico, Ireland and India, Viatris also announced the completion of a sale of an injectable drugs manufacturing site in Poland.
Layoffs are "expected to occur in phases over the next few years," Viatris said, and "wherever feasible" the company would try to find buyers for its facilities to preserve as many jobs as possible. Several years of tightening market conditions and regulatory scrutiny, however, has meant many of the large generic drugmakers have narrowed or restructured their operations.
Closure of the Morgantown site is a significant step, given the site's size and more than half century of operation. The West Virginia Metro News reported 1,500 jobs would be eliminated once the plant is closed. Before the merger with Upjohn, Mylan struggled to bring the site into compliance with Food and Drug Administration standards, leading to a costly warning from the regulator.
Mylan has also had issues at other sites, including in India.
The closing or divestiture of the five sites specified by Viatris Friday will result in between $500 million and $600 million of pre-tax charges, including inventory write-offs, severance and employee benefits expenses.
Executives said shedding the five sites would mean between $250 million and $300 million in annual costs savings, once closure activities are completed.
More details will be provided as they are finalized, Viatris said, and the company plans to hold a meeting with investors in March.