Consort Medical's UK operations may be in line for more job losses as further collateral damage from Pfizer's withdrawal of Exubera from the market.
The contract manufacturer is soon to cease all production of the Exubera inhaled insulin device, which was once a major contract for Consort, formerly known as Bespak.
Recently the firm admitted that the blow from the Exubera loss was too big to bear and announced a large scale back involving the closure of its Milton Keynes facility and 165 job losses.
All of Consort's UK operations will soon be consolidated into the one site at Kings Lynn, which currently employs over 500 people, although the company reportedly told a local news outlet that the restructure has left an additional 27 jobs in this location hanging in the balance.
Outsourcing-Pharma.com asked Consort to comment further, however, it failed to do so.
For the past six months Consort and its joint Exubera manufacturing partner, West Pharmaceutical Services, have been scaling back their Exubera-related operations as it became increasingly obvious that Exubera wasn't the blockbuster Pfizer had trumpeted it as, and production cuts were ordered by the drug giant and its partner Nektar.
As a result of expected revenues that failed to materialise and costs from ensuing restructuring and job cuts, both firms have experienced financial woes.
In the first half of this year to end of October, Consort's pre-tax profit dropped to £4.5m, down from the £7.6m reported in the comparable period in 2006, largely due to a £4.0m impairment charge relating to the Milton Keynes closure.
When announcing the interim results last week, the company did stress, however, that it remained "on track" to achieve management's profit expectations for the full year.
The UK firm's initial estimates put total charges and cost related to the site closure at around £16m, a "significant proportion" of which the company expects to get back from Nektar. Still, it will be left to shoulder some of the financial burden.
Similarly, the repercussions of Pfizer's dramatic Exubera exit are finally filtering through to West Pharmaceutical Services, with the company preparing to restructure its affected Tech Group contract manufacturing unit.
A plant closure and job cuts are on the way for the wounded Tech Group, to be completed by the end of 2008, with an expected saving of $3m that year and annual operating savings of $7m thereafter, it was announced last week.
Specifically, the company will consolidate two of its tool production operations into one facility, in Scottsdale, Arizona, and by reductions and consolidations at its other production, engineering and administrative operations in North America. 250 positions -13 per cent of the current workforce - will be axed. Incidentally this is believed to be 50 more positions than are currently being filled by workers dedicated to the Exubera contract.
As part of this action, the company is preparing to take a $12m hit in restructuring charges, including roughly $2.5m this year and an estimated $9.5m in 2008.
Meanwhile, Consort recently announced that talks over any potential takeover for the company, first initiated in September, have been halted.
"Whilst the company has subsequently received proposals indicating interest in Consort Medical, those were not considered to adequately reflect the value of Consort Medical and its prospects", said the firm.
"Accordingly, the company confirms that it is not engaged in any discussions regarding a potential offer for the company".
The firm has also promoted Jon Glenn to chief executive from finance director. Glenn will replace Mark Throdahl, who is leaving the company after six years.
Glenn was appointed finance director in September last year and was previously the global head of finance at Celltech.