Patheon warns 400 jobs at risk as Swindon site trimmed
News of the potential layoffs comes as Patheon makes plans to wind down commercial production at the Swindon, UK plant. Patheon will stop non-cephalosporin commercial manufacture at Swindon, if possible transferring work to other sites, and direct some development business to its other plants.
As Patheon cuts back operations at Swindon over the next two to three years 400 jobs are at risk. A first wave of layoffs is already underway with Patheon detailing plans to cut 91 employees from its global development and commercial production units this week.
When Patheon outlined the plan in September it hoped to sell the Swindon site as a going concern, telling investors early talks with interested parties were underway. However, a filing with the US Securities and Exchange Commission shows Patheon is now readying to wind down operations.
The exception is development services. When planning the sale Patheon said it expected to keep its pharmaceutical development assets at Swindon. Now, as other areas wind down, Swindon will still add development business but direct projects that need commercialisation activities to other sites.
As a result of the restructuring at Swindon Patheon expects to incur an impairment charge of up to $60m (€46m) when it reports its second quarter results. Patheon has allocated a further $5.4m for employee termination benefits in the quarter.
Global changes
Cuts at Swindon are just one part of wide-reaching changes to the footprint of Patheon. The Canada-based CMO (contract manufacturing organisation) is restructuring operations in its home territory and closing a plant in Caguas, Puerto Rico.
In September Jim Mullen, CEO of Patheon, said the changes were needed to “aggressively improve the performance” of the core business. Mullen admitted financial performance at Patheon has been “uneven at best”. Since outlining the plan shares in Patheon have risen by more than 20 per cent.
