Xellia Pharmaceuticals, the largest and last maker of key antibiotics APIs in Europe, will shutter its Copenhagen production facility in a move seen as a blow to EU reshoring efforts.
The Danish drugmaker plans to slowly unwind operations at the facility over the next decade and move its anti-infective production “outside of Denmark,” the company said in a May 6 press release. When completed, the closure will result in the loss of about 500 jobs.
The facility currently makes anti-infective APIs and finished dosages for serious and often life-threatening conditions. About half of its products show up on the EU’s list of critical medicines and World Health Organization’s list of essential medicines.
The phased closure of the Copenhagen facility will begin with a transfer of production of the antibiotic API vancomycin hydrochloride, which is expected to be completed sometime in 2028, the company said.
Unless health systems funded by individual governments within the EU are willing to pay more for generic medicines, more companies will likely have to move operations, Michael Kocher, Xellia’s chief executive, told The Financial Times.
“We are discussing so much about reshoring,” he told the FT. “I think it’s just as important to make sure that what we have in Europe stays in Europe.”
Currently, between 60% and 80% of APIs used in the EU come from China and India, according to the Mercator Institute for China Studies.
The Copenhagen facility wind-down is part of Xellia’s efforts to juggle growing price pressure, increasing operational expenses and competition in the anti-infectives sector of the market.
The company said it is looking at “several potential locations” that are part of or “beyond the organization’s current manufacturing network.” In addition to its Copenhagen facility, Xellia operates production sites in Budapest and Taizhou, China.
Xellia previously had a presence in the U.S. until June 2024, when it sold its Cleveland plant that produced lyophilized vials and aseptically filled ready-to-use IV bag products to London-based generics maker Hikma for $135 million in cash and an additional $50 million based on contingencies.