Sources inform “Globes” that Serono (NYSE: SRA; SWX: SEO), the world’s third largest biotechnology firm, has decided to shut down its activity in Israel. InterPharm Laboratories in Ness Ziona will be closed by the end of the year, leaving Serono with a small development team in Israel to evaluate future investment opportunities.
Since entering Israel in 1978, Serono has invested hundreds of millions of dollars in R&D and production infrastructure. The 180 employees at InterPharm, Israel’s largest biotechnology company, which developed the active ingredient for Serono’s Rebif drug for the treatment of multiple sclerosis (MS), will now be laid off, and the company will be closed down. Up until now, the drug has been manufactured in Israel, and at Serono’s factories in Switzerland.
Serono said that the up-to-date processes for biotechnological manufacturing had rendered the plant in Ness Ziona out-of-date. An economic viability survey for a new plant in Israel, planned at a cost of $60 million, found that Serono’s global manufacturing needs were already being met, and there was no need for a new production center.
InterPharm general manager Dr. Ezra Ouziel said, “We’ll offer employees help in finding work, and a generous severance package. We’ll also try to offer jobs within the global Serono group, wherever possible.”
At the beginning of July, insufficient resources caused the Investment Promotion Center of the Ministry of Industry, Trade and Labor to approve only a third InterPharm’s request for a new factory, together with a promise that the remainder would be approved later. Several months ago, InterPharm laid off 82 employees, citing the transition to its new production technology in the new plant, planned as a biotechnology center for R&D and manufacturing.
In January 2004, Serono vice chairman and CEO Ernesto Bertarelli met with Minister of Industry, Trade and Labor Ehud Olmert to discuss the company’s future investment in Israel, as part of consideration of its investment alternatives around the world, in accordance with future technologies.
Published by Globes [online] - www.globes.co.il - on September 20, 2004