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Exclusive-Roche looking to sell or shut down California biologic drug plant

Published 05/31/2023, 06:05 PM
Updated 06/01/2023, 07:06 AM
© Reuters. FILE PHOTO: A sign at a diagnostics site for Swiss pharmaceutical giant Roche is seen, in Burgess Hill, Britain, October 7, 2020.  REUTERS/Peter Nicholls/File Photo

By Michael Erman

(Reuters) - Swiss drugmaker Roche Holding AG (OTC:RHHVF) plans to sell its 800-employee drug manufacturing plant in Vacaville, California, or it will shut the factory by 2029, according to e-mailed letters to workers seen by Reuters on Wednesday.

In a statement, Roche confirmed the divestiture plan for the site, which makes monoclonal antibodies from genetically modified living cells, but did it not address the potential closing of the plant or its timeline.

The company said in the statement it does not expect to need the very large volumes of the medicines the plant provides, and large-scale production will be done in one of the company's newer plants.

It also plans to focus on drugs targeting smaller patient populations moving forward and to draw on a range of biotechnology methods beyond monoclonal antibodies, it said, adding there would be no impact to operations or employees at this time.

Roche is under new leadership this year after CEO Thomas Schinecker took the helm and Theresa Graham became head of the pharmaceuticals division in March.

The Swiss group is under pressure to develop new treatments to offset the loss of billions in sales due to cheap biotech copies of its established cancer medicines Herceptin, Avastin and Rituxan, some of which are made in Vacaville.

It is also contending with dipping revenue for its COVID-19 therapies and tests.

The company said it is seeking a buyer that will continue to use the plant as an operating facility.

If the company is unable to find a buyer, it will ramp down production and close the plant in 2028 to 2029, the emails said.

© Reuters. FILE PHOTO: A sign at a diagnostics site for Swiss pharmaceutical giant Roche is seen, in Burgess Hill, Britain, October 7, 2020.  REUTERS/Peter Nicholls/File Photo

Roche acquired the plant more than a decade ago with its purchase of U.S. biotech Genentech. The plant makes drugs for cancer including Avastin and Herceptin, as well as Actemra for rheumatoid arthritis.

During the pandemic, Roche collaborated with Regeneron (NASDAQ:REGN) Pharmaceuticals to increase supply of that drugmaker's COVID-19 antibody treatment. Roche manufactured the treatment at the Vacaville plant, which it sells outside the U.S. under the brand name Ronapreve.

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