Shares of Viatris VTRS fell slightly after the drug company announced it expects to close or divest up to 15 factories and may axe up to 20%, or 9,000, of its employees.
Viatris shares recently traded at $17.59, down 0.54%, but have climbed about 6% since their first day of trading on Nov. 17.
“Viatris' restructuring initiative incorporates and expands on the restructuring program announced by Mylan earlier this year as part of its business transformation efforts,” the company said in a statement. “Viatris' initiative is intended to reduce the company's cost base by at least $1 billion by the end of 2024 or sooner, with a significant portion of the reduction expected to be achieved within the first two years.”
Factories that will be part of the shrinkage include ones in Morgantown, West Virginia; Baldoyle, Ireland; Caguas, Puerto Rico; and two units in India. “The workforce reductions at the impacted manufacturing sites announced today are expected to occur in phases over the next few years,” the company said.
“Wherever feasible, Viatris will seek to find potential buyers for its facilities in order to preserve as many jobs as possible and will work with impacted communities to identify appropriate potential alternatives,” Viatris said.
The company expects to incur pre-tax charges of $500 million to $600 million for the five affected factories. It sees potential annual savings of between $250 million and $300 million related to the move.