A renowned pharmaceutical site in Northumberland has been proposed for closure, which the Gazette understands could affect around 130 jobs.
Staff at Covance, in Alnwick, were issued with letters yesterday informing them that they could be facing redundancy later in the year.
The company has said that the Willowburn Avenue site will operate at a loss after five years of contractual payments by Sanofi – which sold out to Covance in 2010 – come to an end after October.
American firm Covance says it is actively seeking a buyer for some or all of the business and will explore ways of avoiding the need for compulsory redundancies.
The company has been looking for a purchaser since April, but while there has been some interest in the site, no formal offers have been made.
Covance will be carrying out a collective consultation exercise with the Alnwick Consultative Committee and there will be individual consultation meetings with staff.
The letter, which was issued to staff by Alnwick’s site lead Sally Old, is headed Reference: At Risk – notification of potential redundancy.
It states: ‘Further to our meeting today, please accept this letter as confirmation that Covance is proposing to close its site at Alnwick.
‘While the pre-clinical market has stabilised overall, the European pre-clinical market is more challenging and volatile, with biotech funding rebounding more slowly than in other parts of the world.
‘At the end of October 2015, significant financial contractual commitments from Sanofi will end, which will immediately impact the profitability and/or viability of the Alnwick site.
‘Since acquiring the Alnwick site in 2010, and notwithstanding Covance’s investment in the facility, staff training and commercial efforts to sell into the site, if not for the five years of contractual payments made by Sanofi, the site would have operated at a substantial loss. Simply put, the Alnwick site will cease to be profitable and operate at a loss once the contractual payments end after October 2015.
‘Given the overall weak market in Europe, combined with the fact that market demands are not aligned with the specific capabilities offered in Alnwick, Covance projects these losses to continue into the future.
‘In April 2015, we announced that Covance was considering strategic options for the Alnwick site. Since then, we have been marketing the site (and continue to do so) and whilst there has been some interest from potential purchasers, we have not yet received any formal offers to purchase either all or part of the business.
‘In light of the serious financial situation, which is not sustainable either in the short or the long term, Covance is considering closing the Alnwick site. A closure of the site could potentially result in your role, along with all other employees, being made redundant.
‘All roles based at Alnwick are likely to be impacted if the site is to be closed. As such, Covance would not propose to use any method of competitive selection criteria to determine which employees should be dismissed.
‘It is anticipated that all of those employees who cannot be redeployed into alternative roles at other Covance sites (and there may be some opportunities in this respect) will likely be dismissed redundant. Accordingly, if an alternative role cannot be found for you and Covance does decide to close the site, you will likely be dismissed as redundant.
‘Accordingly, please treat this letter as formal written confirmation that your role is at risk of redundancy.
‘Covance will be carrying out a collective consultation exercise with the Alnwick Consultative Committee (ACC) in the coming weeks as the appropriate representatives of all affected employees.
‘Further information on Covance’s proposals will be provided to the ACC and you along with all other affected employees will be kept informed of the progress of the consultation process.
‘Covance will also explore with the ACC ways in which to avoid the need for compulsory redundancies.
‘In the coming weeks, we will write to you again to set up an individual consultation meeting. The purpose of that individual meeting will be to discuss and evaluate with you any potential redeployment opportunities for you and also to allow you to propose any ways in which you believe that Covance might be able to avoid the need for any redundancies or indeed ways in which to avoid the responsibility of your role being made redundant or to mitigate the effect of redundancy.
‘During this meeting you will be allowed to raise any questions or representatives you may have relating to the company’s proposals, as well as any alternatives you may wish to suggest.
‘The goal of this consultation process is to evaluate any options that may help to avoid the need for redundancy. However, if nothing changes during this period it is possible that your position may be redundant and your employment may be terminated by reason of redundancy.
‘Please be aware that Covance is still actively seeking to find a purchaser for some or all of the business and will continue to explore ways of avoiding the need for compulsory redundancies’.
Covance is a contract-research organisation and drug-development service company that has helped bring one-third of prescription drugs to market.