Health firm Shire has confirmed it has no plans to cut jobs after acquiring the assets of a Northumberland drug manufacturer.
The Journal exclusively revealed how the assets of SCM Pharma were bought by FTSE and NASDAQ-listed Shire, its main client, in a deal triggered by the loss of a manufacturing licence.
For the last 10 years SCM Pharma has specialised in making drugs destined for clinical trials, along with licensed medicines required by patients in niche markets, but the business ran into difficulties in March following a routine inspection at its Prudoe facility by the MHRA (Medicines and Healthcare products Regulatory Agency).
The MHRA issued what is known as a GMP Non-Compliance Statement after the visit and production in one area came to a halt.
SCM Pharma didn’t have the funds to operate with limited manufacturing and invest in remedial work required to address the issues, so the directors placed the firm into the hands of administrators at PwC on August 6.
That paved the way for Shire, a Hampshire-headquartered drugs giant that employs more than 5,000 people in 29 countries, to exercise its step-in rights as the company’s largest customer, a move which effectively saved the workforce of around 80.
Shire has now confirmed that it has only bought the trading assets of SCM Pharma and has not brought the business as a whole.
The firm said it has taken this action to safeguard the production of Buccolam, a drug used to treat children with epilepsy, and that none of the other contracts SCM Pharma had will be fulfiled.
A spokesowman for Shire said: “The decision to place SCM Pharma Limited into administration was taken by SCM’s directors.
“Shire acquired assets from the administrators of SCM in order to continue manufacturing its product Buccolam, with a view to safeguarding the supply of Buccolam for its patients.
“Shire has worked closely with the MHRA in order to transfer SCM Pharma Limited’s manufacturing licence into Shire’s name. Shire has the licences required to manufacture Buccolam going forward.
“SCM Pharma Limited is now in administration and is not part of the Shire group. Shire will manufacture Buccolam in its own name.
“There are no current plans for redundancies. Shire’s focus is on the manufacture of its own product Buccolam, and to this extent it is business as usual. Shire has no plans to enter into new contracts to manufacture products owned by other companies at SCM’s former site, and is not party to SCM Pharma Limited’s contracts.”
SCM’s founder Fiona Cruickshank OBE, who has resigned as a non-exec director, added: “I am pleased to hear our hard work has paid off and there are no planned redundancies as that was my main aim throughout the process.
“I hope that Shire can work with the MHRA and existing clients to ensure supply of products to patients continue. The ongoing production of Buccolam here in the region is good news for the North East’s manufacturing sector.”