Boots may close division after Manoplax disaster
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Your support makes all the difference.BOOTS could be forced to sell off or close its pharmaceuticals business, the company confirmed yesterday, writes David Bowen.
Following the withdrawal of its only patented drug last week, it is reviewing its operations to decide what to do with the people, equipment and raw material that had been committed to the production of Manoplax.
'There is no point in saying we are going to rule anything out, although we have every confidence in the pharmaceutical business,' a spokesman said.
The review will consider all ways of using the resources that are now idle, including bringing other projects forward.
The spokesman said: 'We will move heaven and earth to avoid making any employees redundant.' Boots Pharmaceuticals employs 7,800 people, of whom 2,200 are in the UK.
Boots withdrew Manoplax, a heart drug in which it had invested 14 years' work and pounds 120m, after finding it was in some cases hastening death.
It has now set aside pounds 35m for stock write-offs and possible redundancies and court actions.
The pharmaceutical division's hopes were pinned on the drug, which some analysts had been predicting would contribute pounds 200m to profits by the late Nineties.
Boots has no other drugs still under patent in the UK, although some non-patented drugs sych as Synthroid are still highly profitable. Last year the division provided half the group's total profits.
The group is putting a brave face on the Manoplax disaster.
'What happened is unfortunate, but it is not that unusual,' the spokesman said.
He added that several drugs were in the pipeline - they include treatments for obesity, schizophrenia and certain types of diabetes - but that the timing of their launch depended largely on official approval.
'But we are talking about a year or two, not a year or 10,' he said.
The future of Do It All, the loss-making do-it-yourself retailer Boots owns jointly with W H Smith, was also under review, the spokesman said.
He could not, however, confirm a report that more than half the stores were likely to be closed, with the rest being pushed up market.
Boots' annual meeting was told on Thursday that Do It All, which lost pounds 14m last year, was the only group company that did not experience an upturn in spending in the first quarter.
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