AstraZeneca, last week, announced that it will eliminate packing sites in Spain, Belgium, and Sweden augment it’s facility in China to keep up with growth in the Asia Pacific markets. The move will cost AZ at least 1,400 positions by 2013.

The closing of the three European plants is part of a regional strategy designed to make sure AZ is producing where the market is. Historically, the company has produced and packed its merchandise in Europe and shipped to China as needed. 

“We now have significantly more demand in China, and we are going to manufacture, pack, and produce closer to where the customers are,” said Sarah Lindgreen, global media relations specialist at AstraZeneca. “This gives AZ more customer insight and reduces shipping costs.”

AZ will establish Macclesfield, Cheshire, UK, as its regional packing center for the European market, transferring packing that is now done at the smaller sites to a central location. There will be a net reduction in headcount at Maccelsfield of about 250 people. Some employees will be taking on new roles, and some of the formulation work that was being done in Europe for the Chinese market will be moved to China. 

“With the increasing wealth of the Chinese population, a shift in the demographics, and a greater awareness of healthcare opportunities, the Chinese are pushing for a range of drug products, including mature drugs that are no longer as popular in the states or Europe,” Lindgreen told 

 on Tuesday. “They want the drugs that were new 10 years ago. They’ve never had access to these medications, and we are seeing significant growth.”

She noted that there will be upgrades at the China plant during the next five years, but at this time AZ hasn’t indicated whether improvements will be in headcount or capitol investments. 

“These moves are a continuation of AstraZeneca’s program to improve the organization’s productivity and efficiency,” stated David Smith, executive vice president of operations, AstraZeneca. “It moves the supply process closer to the customer, responding to their requirements and improving the security of the product wherever it is bought.”

In other news, AstraZeneca was awarded a temporary restraining order against Teva Pharmaceuticals to stop the generics firm from marketing its version of AZ’s asthma drug Pulmicort. As an addendum, AZ will have to stop selling its own generic version of the drug that it developed with Par Pharmaceuticals. 

Articles

AstraZeneca is releasing 1,400 employees in Europe, and refocusing its packing system in an effort to move product closer to where the demand is. In this case, that's China.

From Europe to China: AZ Restructures Packing Strategy

After months of negotiations and a couple of offer rejections, King Pharmaceuticals has secured purchase of Alpharma for $1.6 billion, or $37 per share.

In August, Alpharma President and CEO Dean J. Mitchell scoffed at King’s initial offer of $33 per share, stating that it did not reflect Alpharma’s true value. King 

 by boosting the bid price and threatening to replace Alpharma board members with its own appointments if Alpharma were to continue to reject its advances. 

The tone on Monday, however, was more pleasant. “The transformation of Alpharma over the past two years has created tremendous shareholder value, and we have consistently said that we will act in the best interests of shareholders,” Mitchell stated in a release. “Our board determined that a combination with King is in the best interests of our shareholders, and provides them immediate access to this value. We look forward to working with King’s team to integrate our companies.”

King is now in possession of Alpharma’s key pain drug Kadian, as well as a topical patch called Flector. Prior to the arrival of Mitchell, two years ago, Alpharma was a generics company. After the generics arm was sold off, the management team transformed the company into a specialty pharmaceutical firm with a focus on pain medication. 

“We think Alpharma shareholders got a fair deal, as the purchase price represents a 23 percent control premium to our fair value estimate,” Morningstar’s Brian Laegeler said in an analyst statement. “The transaction is a necessary one for King, which has major patent expirations within its own portfolio, [and] Alpharma's pain-management portfolio complements Remoxy, King's lead candidate for pain.”

King said that it expects to save between $50 million and $70 million in general and administration, R&D, and sales force costs for the launch of Remoxy.

After months of negotiations and veiled threats, Alpharma's board of directors has sealed the deal with King Pharmaceuticals. Alpharma is now $1.6 billion richer, and King gets access to a handful of new pain treatments.

Pharmaceutical Executive-11-26-2008

From Europe to China: AZ Restructures Packing Strategy

Alpharma Approves King Purchase