New GlaxoSmithKline chief executive Emma Walmsley has played her first big hand, proffering a revamp of the pharma group’s UK manufacturing operations and the possible sale of antibiotic and nutrition brands.
The proposals could see the company sell off its Horlicks malted milk brand in the UK – although it will hang onto it in India where it is a big growth product – as well as its cephalosporin antibiotics business and some other nutritional products including its MaxiNutrition brand.
Another big change in the proposals is that GSK is backtracking on plans to build a £350m ($456m) biopharmaceutical facility in Ulverston, Cumbria, that was announced as part of a £530m investment package in 2012 that would have created 500 jobs and would have been the company’s first new plant in the UK for decades.
It’s a massive blow to the town, not least as Ulverston is also one of the sites for the production of GSK’s cephalosporin antibiotics, along with part of its Barnard Castle site in County Durham and Verona in Italy, so the future of the existing plant is also in doubt. Local MP John Woodcock said that no jobs will be immediately affected and that GSK will be looking for a buyer for the plant.
GSK said a nutritional product manufacturing site in Slough, Berkshire is also heading for closure, while some manufacturing activity at its Worthing site in the UK – which makes antibiotic active pharmaceutical ingredients (APIs) and finished products and was sent a warning letter last year after failing an FDA inspection – will be outsourced.
The company said its plans – which will result in around 320 job losses – are designed to “improve the efficiency and competitiveness of its manufacturing network” but are in no way related to Brexit.
In an attempt to soften the blow, Roger Connor, GSK’s president of global manufacturing and supply, said that the group still intends to invest more than £140m over the next three years at its sites in Ware, Hertfordshire, Barnard Castle and Montrose in Scotland to expand manufacturing for respiratory and HIV medicines.
That is an addition to a £275m programme announced last year, he said. Walmsley will no doubt explain the change of heart in more detail during GSK’s interim results meeting next week.
In the meantime the company has also announced a product divestment – selling its anthrax prevention drug raxibacumab to Emergent BioSolutions for around $96m. The FDA-approved therapy is tied to a $130m supply deal with the US government, which will be taken over by Emergent.