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The Pulse of the Pharmaceutical Industry

Novartis AG Finalizes Suffern, NY Plant Closure, Lays Off Remaining 61 Workers

Written by: | | Dated: Wednesday, December 30th, 2015

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Switzerland-based Novartis (NVS) announced that it is continuing with its plans to sell more than 160 acres around its Suffern, NY facilities.

Novartis has been making fairly regular job cuts as the company restructures. On Jan. 19, 2015 it announced it was closing a manufacturing plan in Puerto Rico by 2019 and laying off 270 people. In December 2014, it announced it was laying off 200 people at its U.S. headquarters in East Hanover, NJ. On Sept. 18, 2014, it indicated it was laying off 83 employees at its Suffern, NY facility. That was part of a two to three-year plan to close the facility by 2016, with ultimately 525 people losing their jobs.

In January, the company announced a three-part deal with UK-based GlaxoSmithKline (GSK). GSK bought Novartis’s vaccines business, except its influenza vaccines, and created a consumer healthcare joint venture. GSK also sold its oncology portfolio and related research and development activities to Novartis, including two pipeline AKT inhibitors.

Novartis is also shifting 7,000 jobs to its Novartis Business Services group. Part of that shift is a new operations center in India with room for 8,000 employees.

Novartis’s Suffern campus is in Rockland County, primarily in Suffern, but also in Montebello. A representative with Cushman and Wakefield’s Metropolitan Area Capital Markets Group, Andrew Merin, told Iohud, The Journal News, that it has winnowed the potential buyers of the property to two developers. There may be multiple tenants, with industrial and commercial plans being considered. It is expected to close in the first half of 2016.

The three parcels of land have a market value of about $70 million.

Of the 525 employees who were once employed there, only 61 still have jobs. They received their pink slips this month, indicating they will be laid off between the end of March and September. This is the seventh and final round of layoff notifications at that facility. Complete closure and finalization of the Suffern plant facilities are targeted for 2017.

The Suffern closing is at least partially related to Novartis losing patent protection for its high blood pressure drug Diovan, which then got hammered by generic competition. At the same time, Novartis has shifted its strategic focus toward oncology, dermatology, respiratory and cell therapy, although heart failure drugs are still part of the mix.

“Changes in our current portfolio, namely the loss of exclusivity of Diovan, have significantly reduced the future product demand on the Suffern site,” the company stated in late 2014. “The site’s future volumes would be significantly below the minimum required to operate it cost effectively.”

The Suffern area officials, as they watched the jobs leave the area, hoped that a buyer would either use the facility for similar operations or for commercial and industrial spaces in order to keep jobs. Apparently there has been some interest in the space for residential development, but local officials are concerned that won’t increase the tax base while only adding to the number of families coming to local schools.

“We continue to work with Novartis and the Rockland Economic Development Corporation,” said county spokesman Scott Salotto, to Iohud, “in seeking an appropriate buyer for the site, and to promote the location among interested parties.”


Source: BioSpace

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