Mylan to shut down W.Va. plant
Viatris — the new company formed through the merger of Mylan and Upjohn — announced Friday that Mylan’s flagship pharmaceuticals plant in Morgantown, W.Va., is on the chopping block as part of the company’s restructuring plan aimed at slashing at least $1 billion in costs by the end of 2024.
The plant — which has been in operation in Morgantown near where Mylan was founded since 1965 — is slated to shut down by the middle of next year, affecting some 1,600 people and likely having ripple effects on West Virginia’s economy.
Viatris said that after the closure it would maintain a “significant” workforce in
Morgantown involving research and development and some business and administrative support functions.
“There will be no immediate employee reductions at the site. It is anticipated that the majority of production will continue for the next seven months, ending no later than July 31, 2021,” the company said. “The majority of employees impacted will remain employed until that time, when they will be offered comprehensive separation packages.”
Viatris plans to close, downsize or divest up to 15 manufacturing facilities globally that are deemed to be no longer viable either due to “surplus capacity, challenging market dynamics or a shift in [the company’s] product portfolio toward more complex products.”
The Morgantown plant, which makes oral solid dose medications, is among five impacted sites identified Friday. The others are in Baldoyle, Ireland, and Caguas, Puerto Rico, plus two manufacturing facilities in India.
“The workforce reductions at the impacted manufacturing sites announced today are expected to occur in phases over the next few years,” Viatris said in a statement.
“Whenever feasible, Viatris will seek to find potential buyers for the facilities in order to preserve as many jobs as possible and will work with impacted communities to identify appropriate potential alternatives,” the company said.
Overall, the restructuring initiative could affect up to 20% of Viatris’ global workforce of 45,000 — or 9,000 people, the company said.
Viatris — which maintains its executive headquarters at Mylan’s old executive base in Cecil — said it was “committed to ensuring supply continuity so that patients’ needs for critical medicines are met. Supply continuity will be achieved, in some cases, within the company’s network.”
The company said it expects to incur pre- tax charges ranging between $500 million and $600 million related to the five impacted sites, which includes severance payments and non-cash charges related to accelerated depreciation and asset impairment charges.
Annual savings from the moves at the impacted sites are expected to range between $250 million and $300 million, Viatris said.
“After more than a decade of building a robust global platform, today we are taking the natural next step as we shape a new company that we believe can meet the needs of patients and customers in this evolving health care landscape,” Viatris president Rajiv Malik said in a statement.
The company said it would provide further details about the restructuring as they are finalized.
The decision to phase out manufacturing operations in Morgantown wasn’t made lightly, Viatris CEO Michael Goettler said.
“We are sharing the details of this announcement now in order to provide as much time as possible prior to the closing date to work with federal, state and local leaders to try to identify alternatives for the site outside of the Viatris network that could potentially preserve as many jobs as possible,” he said in a statement.
The loss of the plant would be a major blow to the regional economy in West Virginia, said John Deskins, director of West Virginia University’s bureau of business and economics.
“Layoffs in and of themselves are a major loss to the north central region, which has around 110,00 jobs in total,” Mr. Deskins said.
“But given the facts that this is an exporting industry that brings dollars into the region, and that many of these jobs are well-paying and high-skilled, the loss will create significant ripple effects throughout the region,” he said. “Ultimately, this will create further losses in employment, spending and tax revenue. It will also damage the housing market in the Morgantown area. Ultimately, it would probably take at least a couple of years to recover from a loss of this magnitude, aside from concerns associated with the pandemic.”