Decommissioning Pharma Facilities

Roger Scott
Asset decommissioning and divestiture presents challenges for pharma companies.

The shape of pharma companies’ real estate continues to change, driven by consolidation among the global players, and by the type and location of facilities they now require. Over the last 20 years, pharma companies’ capital programs have focused on building manufacturing, research and development (R&D) facilities.

More recently, mergers, workforce reductions and more efficient workspaces have changed the focus toward real estate consolidation, divestiture, and creating flexible spaces for bio-pharma processes. Patent expirations and the rise of contract manufacturing are also redefining real estate requirements.

In rationalizing their real estate portfolios, companies are undertaking consolidation programs to reduce their real estate footprint, maximize the efficiency of buildings, improve workplace environments, and reduce operating costs. It may make sense to re-purpose and/or divest underutilized or unwanted manufacturing, R&D and office facilities.

Decommissioning and divestiture are complex endeavors. However, the effective management of these transitioning assets is essential if their full value to the corporate portfolio is to be realized. Companies are typically faced with defining divestiture options, selecting the most appropriate option, and executing the plan in compliance with environmental health and safety regulations. As regulatory compliance is constantly changing, successful facility deactivation requires the coordinated efforts of a team of legal and technical experts.

Divesting former manufacturing and R&D real estate assets can be more challenging than corporate office space.

Divesting former manufacturing and R&D real estate assets can be more challenging than corporate office space. Manufacturing and R&D facilities are usually associated with long-term environmental, legal, and financial liabilities. Brownfield sites need expert environmental analysis, including soil, groundwater and surface water, testing for hazardous compounds, and ensuring that risks and liabilities are identified and managed.

Companies usually aim to release the land as safely and quickly as possible for productive re-use. In some cases, the original owner will have regulatory obligations to continue legacy monitoring and site remediation following the sale of real estate assets.

Faithful+Gould provides integrated project and program management support to clients who are rationalizing their portfolios. We help develop strategies to reach cost-efficient and regulatory compliant closure. Decommissioning and divestiture commissions may comprise multiple facilities, and, where appropriate, we assimilate these into a single program.

We serve as third party representation for the client, providing support for program governance and compliance, project management, cost management and asset portfolio management from the earliest program planning through to project closeout. We work closely with clients’ in-house teams, while respecting the sensitivities of closures and potential staffing reduction.

Faithful+Gould provides integrated project and program management support to clients who are rationalizing their portfolios.

Timely information is critical for decision making, so our reporting mechanisms are designed to give clients program-level overview in real time to control all project scopes of work. The application of project controls and best practices allows full transparency and accountability for client and external audits.

Our global pharmaceuticals and biotechnology group has longstanding experience, with operations in the Americas, UK and continental Europe, and Asia Pacific. We work closely with the world’s leading drug companies, helping them identify optimal portfolio strategies to meet their changing business needs. Our client portfolio includes Amgen, Bristol-Myers Squibb, GlaxoSmithKline, Hoffmann-La Roche, Johnson & Johnson, AstraZeneca, Merck, Novartis, Pfizer and Sanofi.

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