Novartis to close drug facility,

Pharmaceutical giant will lay off about 400 staffers

Pharmaceutical giant Novartis AG (NYSE: NVS) will lay off about 400 staffers and leave its 692,000square-foot drug-making facility in Longmont, just more than a year after it reopened the site.

In a statement, the Swiss company said it will close the six-building complex by July 9 at the latest. The approximately 400 staffers at the site will be offered severance packages, job-placement support and some benefits.

Novartis said that it anticipated it would need the Longmont plant to fulfill its expected demand alongside its sister plants in Libertyville, Illinois, and Durham, North Carolina, but later decided that it could meet all of that demand through those sites alone.

“We will now focus on meeting the needs of patients through our

Libertyville, Illinois and Durham, North Carolina sites, where we will continue to invest in next-generation processes,” the company said in a statement.

An unspecified number of employees will be offered the chance to relocate to the remaining plants or will be offered to stay on with the company as remote workers.

Novartis opened the plant in Januar y 2020 with the hopes of bringing it up to federal drug facility standards to produce between 800 to 1,200 doses of its spinal muscular atrophy drug Zolgensma. The treatment is a one-time intravenous injection that combats the ef fects of SMA, a genetic disorder that prevents newborns from developing the strength in their backs needed to move body parts unassisted. Most patients die before they reach the age of 2.

The drug is the most expensive in the world at sticker price, costing $2.1 million for the single dose. Novartis’ latest annual report shows that it sold $920 million wor th of the drug, split roughly in half between the U.S. market and other countries where the drug is available for sale.

Novartis’ closure also throws the drug campus in Longmont back into the market. Astrazeneca PLC (NYSE: AZN) vacated that campus and its location in Boulder in January 2019, and later sold the Longmont campus to Novartis’ gene therapy subsidiary Avexis for $30 million. The company said it will “explore all options” for divesting itself from the property.

Avexis was later rebranded as Novartis Gene Therapies.

Longmont granted the company $1.9 million in incentives for reopening the plant in early 2019, and the Colorado Economic Development Commission granted up to $7.26 million to the company in May 2019.

In a statement, Longmont city manager Harold Dominguez said the city issued just $52,901 out of what it committed and intends to recover those payments.

He called the pending closure “unfortunate and disappointing,” and said local economic-development groups are working to provide support for affected workers and find a use for the campus.

A spokesperson for the Colorado Office of Economic Development and International Trade declined to comment specifically on Novartis’ departure, but said any tax credits or benefits issued by the agency can be clawed back if a company doesn’t fulfill its net new job promises.

Longmont Economic Development Partnership president Jessica Erickson declined to comment.

Colorado Biosciences Association vice president Emily Roberts told Bizwest that the trade group doesn’t believe Novartis’ departure will undermine the momentum of the industr y expanding in the state. She pointed to major operators such as contract manufacturer AGC Biologics acquiring Astrazeneca’s former Boulder location last June, as well as startup companies as businesses that can absorb Novartis staff.

“We feel confident we’ll be able to attract new companies, and be able to hopefully find a place for those employees that were impacted by the decision today,” she said.