Novartis to Shut New York Plant as Diovan Sales Decline

Novartis AG (NOVN) plans to shut a plant in New York state that makes the heart drug Diovan and the malaria treatment Coartem, as part of a productivity review.

The closing of the Swiss drugmaker’s factory in Suffern, New York, will affect about 525 jobs, Eric Althoff, a spokesman for the company, said in an e-mailed statement today. Novartis may transfer some employees to other locations, he said.

The announcement comes a day after Novartis said it would cut 500 support jobs in Switzerland to free up resources to hire employees to market new products this year. The company is bracing for a decline in sales of Diovan, one of its best-selling drugs, which lost U.S. patent protection in 2012.

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

The Basel, Switzerland-based company will begin closing the factory in the second half of the year. The process may take two to three years to complete, it said.

To contact the reporter on this story: Eva von Schaper in Munich at evonschaper@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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