Irish jobs in focus as world's biggest drugmakers join in 'pharma frenzy'
SOME of the world's biggest drugmakers – including a host of Ireland's largest employers – have announced a series of massive deals that could have major consequences for the country's jobs-rich pharmaceutical sector.
Swiss-headquartered Novartis, the world's second biggest drugmaker by sales, is at the centre of what analysts are calling the "pharma frenzy".
It employs 1,479 people in Ireland across four sites in Dublin and Cork.
Yesterday, the company announced a multi-billion revamp that includes swapping assets with GlaxoSmithKline, which itself employs 1,450 in this country, as well as selling its animal health arm in a bid to simplify its business and cope with healthcare spending cuts and generic competition.
The transaction will see Novartis acquire GSK's cancer drug portfolio in exchange for the latter's vaccines unit, excluding its flu drug franchise, which is being put up for sale separately.
Novartis will pay between $14.5bn and $16bn (€11.6bn) for the oncology unit – which will see GSK effectively give up its ambitions to be a global leader in cancer treatments – and sell its vaccines business for about $7bn.
Cancer treatments are a popular focus for drug makers, thanks to novel medicines that use the body's immune system. But oncology is an extremely competitive marketplace and some analysts said it was right for GSK to exit a field where it was only number 14 in the world.
Novartis and GSK will also create a joint venture consumer healthcare business with $10bn in annual sales and a leading position in four key over the counter categories – pain, cough and cold, dermatology and oral health. Many of GSK's over the counter drugs, like Panadol and Niquitin, are currently produced in Dungarvan, Co Waterford.
Novartis also announced the sale of its massive animal health business yesterday, to Eli Lilly – whose existing animal health unit includes a large manufacturing facility in Sligo that makes animal vaccines. The deal is expected to create a new industry leader. Eli Lilly employs about 800 people in Ireland, in Kinsale, Cork City and Dublin as well as Sligo. It is not yet clear what the deals will mean for these companies' Irish employees.
Spokespeople said it was too early to give details.
However, a representative from GSK told the Irish Independent it would be "business as usual" for 2014, as the transaction with Novartis is not likely to close until early 2015.
Novartis chief executive Joe Jimenez said the revamp, the result of a keenly awaited strategic review at the company, would help make the drugmaker "fighting fit" to meet the challenges of the global healthcare industry over the next ten years.
The deals mark a major reorganisation for GSK too, which is to return £4bn to shareholders following the changes.
The news comes at a time of almost unprecedented activity for the global pharmaceutical industry, hot on the heels of reports that AstraZeneca has turned down a $101bn bid approach from Pfizer – a story that sent shares across the sector surging.
Meanwhile, Westport employer Allergan, the maker of wrinkle cure Botox, has received a separate takeover approach from Canada's Valeant Pharmaceuticals in partnership with activist investor Bill Ackman.
Their unsolicited $47bn bid for Allergan could create one of the world's five biggest drug companies.
Allergan employs about 1,000 people in Westport at a multi-million manufacturing plant where it makes Botox and other products.
Who are these companies and what do they do?
This US company has long been one of the star performers in the specialty pharmaceutical sector, with growth driven by expanding use of its blockbuster product, Botox, combined with eye-care drugs, skin-care formulas and breast implants. Allergan produces Botox, a purified form of the poison botulinum, at a plant on the outskirts of Westport, Co Mayo, which employs more than 1,000 people. While most people think of Botox as a cosmetic drug, about half of its use is in neurology. The company once had a manufacturing facility in Arklow, Co Wicklow, which produced silicone breast implants, but that was wound down. It also has a European centralised customer service function in Dublin.
The global number two by sales, Swiss-headquartered Novartis has operations in Dublin and Cork, where it employs a combined 1,479 people. This includes a business services centre at Elm Park and a second commercial unit at Beech Hill in Dublin. In Cork, it has a massive operation at Ringaskiddy that manufactures the active ingredient for a large number of the top-20 products in the Novartis portfolio, products like asthma drug Seebri and blood pressure medication Exforge.
British-headquartered GSK is the fourth largest pharmaceutical manufacturer in the world, leading in three main therapeutic areas – anti-infectives, central nervous system and respiratory treatments. The company first came to Ireland in 1975. It now employs about 1,450 people across four locations. It produces a wide range of active drug ingredients at a "primary site" at Currabinny in Cork, including cancer and HIV treatments. It has two manufacturing plants at Dungarvan in Waterford – one which makes a range of over-the-counter medicines including Panadol and Solpadeine, and one producing oral-care products like dental fixatives. It also has a sales centre in Dublin and a dermatology manufacturing plant in Sligo owned by subsidiary Steifel.
US giant Lilly has been in Ireland for three decades and now employs around 700 people in four locations: Kinsale, Cork City, Sligo and Dublin. Its Kinsale facility is its most important manufacturing plant in the world; the company has invested €1bn in it to date. Kinsale produces the active ingredients for several of Lilly's top-selling drugs including anti-depressant Zyprexa. The products from Kinsale are shipped to finishing plants around the world, where they are converted to final-dosage forms such as tablets, capsules, or injectibles.