US-drug gaint Pfizer will be soon be shutting down two of its plants in Aurangabad, Maharashtra and Irungattukottai (IKKT) near Chennai in Tamil Nadu citing lack of viability.
The exact timing of the exit of the sites is yet to be determined.
The two sites employee about 1700 people.
Both the plants are export-oriented and came under Pfizer’s ownership after it acquired US-based drug maker Hospira in a $17-billion deal in February 2015.
“Earlier today we announced to colleagues at our Aurangabad and IKKT sites in India that we will immediately cease manufacturing at the sites with the intention to exit both the sites as soon as possible in 2019,” according to an internal note shared with the employees.
“Following a thorough evaluation of these sites, we concluded that due to the very significant long-term loss of product demand, manufacturing at these sites in not viable,” the note said.
“We recognise that this is very difficult news for our colleagues there, and we will work closely with them during this transition,” the note said.
Pfizer suspended manufacturing at IKKT due to USFDA observations. IKKT produces generic injectable antibiotics such as cephalosporins, penems and pencillins for the US, EU and other global markets.
The plant got 11 observations from the regulator following inspections in March-April last year.
The plant has been under USFDA scanner for a while. It was served with warning letter in May 2013 for significant violations of good manufacturing practices.
Aurangabad plant supplies penicillin and penem active pharmaceutical ingredients.
Following the closure of these two plants, Pfizer will be left with manufacturing sites in Goa, Visakhapatnam and a joint venture plant in Ahmedabad that makes cancer medicines.
Pfizer secured the Goa facility after acquiring Wyeth. The Visakhapatnam site is a greenfield factory in which Pfizer invested around $375-450 million to make injectables.
The company said that the announcement does not directly impact operations at other sites.
Pfizer in 2015 sold its oldest plant in Navi Mumbai for Rs 178 crore following an assessment of its long term viability and its ability to meet production targets. The 80 odd employees were given volutary retirement.
While Goa and Visakhapatnam are meant for exports, Pfizer relies on third party production facilitates for its India formulation business.