Albany Molecular Research (AMRI) is shutting down its Syracuse Research Center and laying off all 45 employees based there, while shifting the facility’s Discovery and Development Services (DDS) activities to other company sites in and outside the U.S.
The facility will close on July 15, AMRI told the New York state Department of Labor in a notice of the shutdown required under the Worker Adjustment and Retraining Notification (WARN) Act.
“We remain committed to our total integrated discovery and development services platform and the capabilities for which Syracuse has become distinguished, and we will be transitioning and consolidating those activities to other sites within AMRI,” William S. Marth, the company’s president and CEO, said in a statement.
Those other sites, AMRI said, included facilities in Albany, N.Y., some 145 miles east of the Syracuse site, as well as in Cedarburg, Wis., Holywell, U.K., and Hyderabad, India.
One site not mentioned by AMRI is Buffalo, N.Y., where the state in 2012 disclosed plans for AMRI to open a drug discovery facility within the planned Buffalo Medical Innovation and Commercialization Hub. AMRI is expected later this year to begin moving 25 workers to temporary lab and office space, part of a larger number to be employed by the company and other employers at the medical hub. Estimates for the hub’s total number of jobs vary between 250 and 300.
On March 28, the state’s economic development agency, the Empire State Development Corp., approved a $50 million state grant toward the $250 million medical hub project, whose partners include AMRI and Fort Schuyler Management Co., the state College of Nanoscale Science and Engineering, and the Buffalo Niagara Medical Campus. In return for the grant, the 120-acre medical hub must employ at least 250 people by January 1, 2020.
AMRI and its partners agreed to use the state money—part of the state’s “Buffalo Billion” initiative to spend that much on regional economic development projects, launched in 2012 by Gov. Andrew Cuomo (D).
The Syracuse shutdown “could mean AMRI will bring an additional 10 to 15 workers to the Buffalo medical hub, the Buffalo News reported yesterday, citing an unnamed “official familiar with the company’s plans.”
AMRI said it expects to finalize its transition plans by the end of April, and anticipates no interruption to current or future projects that require resources from the Syracuse site, which is technically located near that city in the town of Cicero, N.Y.
According to the company’s website, the Syracuse site “provides services including chemical process research and development, custom chemical synthesis, and scale-up of pharmaceutical intermediates and final products."
AMRI said the Syracuse shutdown was consistent with ongoing efforts to consolidate its facilities “to more effectively utilize its discovery and development resource pool and to further reduce its facility cost structure.”
The shutdown comes less than a month after AMRI said it will broaden its custom and complex drug development services and products for both generic and branded biopharma customers through a $41 million acquisition. AMRI said March 24 it will acquire Cedarburg Pharmaceuticals, a contract developer and manufacturer of complex API's headquartered in Grafton, Wis.
Cedarburg’s core capabilities include controlled substances, steroids, prostaglandins, vitamin D analogs, conjugation chemistry and inorganics for the analgesic, ophthalmology and oncology therapeutic areas.
AMRI estimated that it will incur between $5.75–$6.50 million in one-time cash and noncash charges related to the layoffs and other shutdown-related activity. The company said its anticipated charges include between $3.75 million and $4.25 million in noncash fixed asset impairment charges, and another $2 million to $2.25 million in cash charges for employee and other related costs.
Most of those charges are expected to be recorded in the second and third quarters of 2014. AMRI also projected annual run-rate savings of about $1.5 million from the Syracuse shutdown.
“The decision we have made, while difficult for our colleagues in Syracuse, reflects the continued evolution of AMRI’s business to better align our operations to most efficiently support our customer needs, while preserving the skills and capabilities that our customers demand as they return to greater utilization of their outsourcing partners,” Marth added.