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Slow Sales of Hormone-Replacement Drug Force Wyeth to Shut Down Plant

Posted on: Tuesday, 11 October 2005, 21:00 CDT

By Thomas Ginsberg, The Philadelphia Inquirer

Oct. 12--Falling sales of the hormone-replacement drug Premarin will force Wyeth Pharmaceuticals to start closing a New York manufacturing plant this year, with total shutdown set for late 2008, the company said yesterday.

The company's Collegeville-based division said about 1,200 employees at the Rouses Point facility would be entitled to seek transfers to other Wyeth facilities worldwide over the next three years. Premarin manufacturing will be phased out and consolidated in a Wyeth plant in Newbridge, Ireland.

"This is part of the overall analysis of our entire network," said a company spokesman, Christopher Garland, adding that the plant had not operated at capacity for two years because of sagging sales.

A government study in 2002, known as the Women's Health Initiative, found that hormone therapy was harmful to women's hearts, bones, minds and moods. The study looked at Premarin and Prempro, another Wyeth product in its Premarin family of drugs.

The plant closing appeared to be a turnaround in Wyeth strategy. In its 2004 annual report, Wyeth said it "stands behind" the drugs and told shareholders that sales trends were "encouraging." It reported a 17 percent jump in second-quarter sales for those drugs this year, to $259.9 million, according to corporate filings.

Overall, however, Premarin sales have fallen 50 percent since the study was released, Garland said. The shutdown announcement came days after Wyeth shares rose on news the company raised its third-quarter earnings guidance, citing higher revenue and cost-cutting.

The stock closed at $45.46 a share yesterday, down 2 cents.

Wyeth, based in Madison, N.J. with about 52,000 employees worldwide, said it would look for a buyer of its Rouses Point site and would maintain charitable operations in the area.

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WYE,

Source: The Philadelphia Inquirer

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