Novartis to cut 500 jobs in shutting U.S. Diovan plant
ZURICH (Reuters) - Novartis NOVN.VX plans to axe around 500 jobs in shutting a U.S. plant that makes its blood pressure pill Diovan, marking the second reorganization of its operations in as many days.
The decision to close the manufacturing site in Suffern, New York will affect 525 jobs, the company said in an emailed statement on Wednesday. Some functions may be transferred to other sites, it said.
The Basel-based firm attributed the closure to declining sales of Diovan, a best-selling drug that lost its patent rights in the United States in 2012, making it vulnerable to competition from cheaper, copycat drugs.
"Changes in our current portfolio, namely the loss of exclusivity of Diovan, have significantly reduced the future production demand on the Suffern site," Novartis said.
"Consequently the site's future volumes would be significantly below the minimum required to operate it cost effectively."
Novartis said it would start shutting down the site in the second quarter of this year but the whole process would take two to three years to complete.
Under new chairman Joerg Reinhardt Novartis is taking a fresh look at its operations as it seeks to maximize productivity.
The closure comes on the heels of Tuesday's announcement that Novartis will reorganize parts of its domestic workforce, cutting up to 500 jobs in its pharmaceutical division to free resources for new roles to support the product launches.
(Reporting by Caroline Copley; Editing by Greg Mahlich)
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