The facility, located in Pithiviers, is being bought by Orgasynth, a Paris based chemical company specialising in the production of fine chemicals and intermediates.
Under the terms of the agreement, Orgasynth will take over the production site including all assets and liabilities. Of the total 94 employees, 77 will transfer to Orgasynth. The remaining 17 employees will either retire or have accepted an offer of early retirement. In addition, Orgasynth will take over the existing business and continue to produce materials for Merck.
The Pithiviers site is around 100kilometres south of Paris and was established in 1973 by Anphar Rolland Laboratories. In 1978, the plant was acquired by Lipha, at that time a subsidiary of Air Liquide. And through the acquisition of Lipha in 1991, the production site came into Merck's hands.
The facility focuses on the development and production of finished products,intermediates and active pharmaceutical ingredients (APIs) used by several of Merck's business units.
The companies said the transaction will be closed as soon as all necessary regulatory approvals have been granted.
This is the latest in a series of restructuring moves at Merck, which has also seen the firm close down a site at Lacassagne, Lyon, to reduce its spending on production at a time when it has suffered some project failures in its product pipeline.
Merck had to discontinue development of three early-stage diabetes drugs last year, dropped an antidepressant partnered with GlaxoSmithKline and reported disappointing Phase III results with its Theratope cancer vaccine partnered with Canada's Biomira. However, it has been lifted by the approval of another cancer drug, Erbitux (cetuximab), which has exceeded analysts' estimates by bringing in €25 million to Merck's coffers so far this year.
And in addition to its manufacturing restructuring, Merck plans to sell off its laboratory distribution business VWR International and operate as a smaller, higher-margin business focused on pharmaceuticals, chemicals and liquid crystals. Last December it sold off its stake in the BioMer joint venture, focusing on orthopaedic devices.
Orgasynth develops, manufactures and markets molecules for the pharmaceutical and dye markets, and recently entered the flavour and essential oil sectors through the acquisitions of the Adrian group in 2001 and of Fontarôme at the beginning of 2003.