Roche to Shut Down Small-Molecule Drug Plant in Ireland, Offering €180,000 Severance Per Employee

Recently, according to a report by foreign media outlet FiercePharma, Roche is reportedly planning to shut down one of its small-molecule drug manufacturing facilities in Ireland next year, resulting in 132 job cuts.

This is not the first time Roche has divested its small-molecule drug manufacturing facilities. Previously, Roche sold three of its small-molecule drug plants in the United States, Italy, and Spain. The Spanish facility was acquired by Recipharm, which also secured a long-term agreement to supply pharmaceuticals to Roche and reportedly retained approximately 200 former Roche employees. Roche employed similar agreements to sell its plants in the United States and Italy.

The Irish facility, however, was one asset that Roche failed to successfully divest. Unable to find a suitable buyer, the company had no choice but to shut it down. Notably, the closure entails the layoff of 132 employees, for whom Roche has generously earmarked severance payments totaling €24 million. This means each employee can receive an average severance package of up to €180,000, equivalent to more than RMB 1.4 million.

Behind the substantial severance costs lies Roche’s unwavering commitment to transitioning from small-molecule drugs to biologics. Since 2015, Roche has announced its transformation plan, aiming to scale down its small-molecule manufacturing capacity while simultaneously bolstering its biologics production capabilities. Alongside the divestiture of three small-molecule production facilities, Roche announced an €800 million investment to expand biologics manufacturing capacity at its plants in Germany, Switzerland, and the United States.

Despite betting on biologics, Roche’s blockbuster biologic drugs, which generate substantial revenue, are facing global threats from biosimilars. Roche executives believe that new drugs in the pipeline will fill these gaps and drive new growth.

Roche is by no means the only company that has chosen to firmly pursue strategic transformation.

Earlier this year, Pfizer announced the closure of two major factories in India that primarily produce penicillin and other generic injectable drugs, affecting approximately 1,700 employees, or about 6% of Pfizer’s global manufacturing workforce. Additionally, a research and development laboratory in India will also be shut down. Eli Lilly is currently cutting 250 jobs at a factory in France, while AstraZeneca is laying off more than 200 employees across two locations in the United States...

This indicates that multinational pharmaceutical companies are accelerating their “transformation and upgrading.” Industry giants are simultaneously “streamlining” their operations and pivoting toward biologics. As patents expire, generics are aggressively capturing market share with significant price advantages, making divestiture a more viable option. Meanwhile, biologics have emerged as a current hotspot. Both Chinese and foreign pharmaceutical enterprises are intensifying their efforts in this field, and even some traditional Chinese medicine manufacturers are actively establishing their presence. Giants already involved in the biologics sector are clearly shifting more resources and capital toward it, aiming to achieve early results and solidify their market standing.

Source: E-Drug Manager, MedValley Comprehensive