Amneal Pharmaceuticals Inc. will shed 550 manufacturing, research and office jobs as it shuts down the Hayward facilities of the former Impax Laboratories after its merger with the East Bay company this week created the nation's fifth-largest generic drug company.
Amneal (NYSE: AMRX) leaders were vague on a conference call Monday, when its $6 billion merger with Impax was completed, about the fate of the East Bay facilities. But Friday the company said a "comprehensive analysis" of its current and future product portfolio, plant capacities, overlapping work and cost structure, it will shutter its Hayward operations.
Essentially, the merger gave Amneal access to Impax's deep basket of generic drugs, a growing branded-drug business, cash and East Bay real estate; now it can shed Impax's costs.
It is the second time in the past six months that a drug maker has shut down East Bay operations because of costs: Under new management, Depomed Inc. (NASDAQ: DEPO) in December said it would close its Newark offices, cutting 255 local jobs.
Amneal, based in Bridgewater, N.J., said the shut down will take 15 months and will result in "a significant favorable impact" financially for the company beginning next year.
"I recognize that these types of announcements are difficult for our colleagues," Amneal President and CEO Robert Stewart said in a statement.
Impax made or sold low-cost generic, extended-release versions of traditional branded drugs, such as the opioid Opana and the epinephrine-injection pen Adrenaclick. But the Hayward facilities, which can produce 1 billion capsules or tablets, had been operating at one-third of capacity.
The closure is a blow to Hayward, where Impax and a couple other companies for years had been the linchpin of its biopharma community. The city had made biotech, in particular, a focus and several smaller, growing companies, such as newly public cancer drug developer Arcus Biosciences Inc. (NASDAQ: RCUS), have moved in.
Impax leased a 45,000-square-foot corporate office building in Hayward and had manufacturing, labs and offices at the end of last year totaling 117,300 square feet of company-owned space and another 165,000 square feet of lease space over seven buildings.