GSK Plans UK Manufacturing Cuts; Nixes Plan for New Biopharma Facility
GlaxoSmithKline (GSK) has announced plans to adjust its UK manufacturing network, which includes a potential sale of its cephalosporins antibiotics business and associated manufacturing, the closure of a consumer healthcare manufacturing site, the nixing of a planned biopharmaceutical manufacturing facility, and an investment in a manufacturing site for respiratory and HIV medicines.
The company plans to undertake a strategic review of its cephalosporins antibiotics business, with an option to sell the business, including the associated manufacturing facilities. These medicines are produced at GSK sites in Ulverston, Cumbria, and Barnard Castle in the UK and in Verona, Italy. The company has also decided to outsource some manufacturing activity at its Worthing site in the UK. GSK will continue to manufacture other antibiotics such as Augmentin (amoxicillin/clavulanate potassium) and will continue to conduct research on new antibiotics. GSK produces three cephalosporin antibiotics brands: Zinnat/Ceftin (cefuroxime), Zinacef (cefuroxime), and Fortum (ceftazidime).
In its consumer healthcare business, the company intends to sell its Horlicks brand, a malted milk drink, in the UK and is proposing to close the associated manufacturing site in Slough, UK, where UK product is made. In addition, GSK intends to sell the MaxiNutrition brand, consisting of sport nutrition products, The combined annual UK sales of Horlicks and MaxiNutrition are approximately £30 million ($39 million). This decision does not impact the Horlicks brand in India or southeast Asia, which accounts for the vast majority of Horlicks’ global revenues. GSK is also exploring options to divest some other smaller non-core nutrition brands.
The proposals for Worthing and Slough will result in a reduction of approximately 320 permanent jobs over the next four years. The proposals announced for Worthing and Slough are subject to employee consultation, which will begin immediately.
GSK has also decided not to proceed with a previously planned investment to build a new £350-million ($454 million) biopharmaceutical facility in Ulverston, saying it no longer needs the additional capacity. GSK had announced the new biopharmaceutical facility in 2012, which at the time of the announcement, would have been the first new GSK manufacturing facility to be built in the UK in almost 40 years.
On the investment side, between now and 2020, GSK plans to invest more than £140 million ($182 million) at its sites in Ware, Hertfordshire, Barnard Castle, County Durham, and Montrose, Scotland. This new investment is in addition to the £275 million ($357 million) announced last year and represents an investment of over £1.2 billion ($1.6 billion) in UK manufacturing since 2012.
GSK employs approximately 17,000 people across the UK, of which 5,000 are in UK manufacturing operations. The company has nine manufacturing sites in the UK and exports approximately 80% of its UK-manufactured products (pharmaceutical and consumer healthcare).
GSK said that none of the company’s investment decisions resulted from the UK’s decision to leave the European Union. “We have a substantial manufacturing presence in the UK and continue to support the network with new investment of more than £140 million ($182 million) in the next three years,” said Roger Connor, president, GSK Global Manufacturing and Supply, in a company statement. “At the same time, we have had to make some decisions which we know will cause uncertainty for some of our employees. We will do all we can to support them through this process.”