Merck To Buy Back Cherokee Pharmaceuticals

Counter to industry trends and its own moves to shed manufacturing operations, Merck & Co. has agreed to buy back a former facility in Riverside, Pa., from PRWT Services. Minority-owned PRWT, which provides business office services, took over the facility in January 2008 and turned it into the contract manufacturer Cherokee Pharmaceuticals. According to PRWT, the challenging business environment in the pharmaceutical industry forced it to sell the site. Cherokee has been manufacturing pharmaceutical ingredients for Merck under a five-year agreement for up to $200 million and had signed up new customers, including DuPont and Solazyme. It also set up a marketing and distribution plan with Sigma-Aldrich Fine Chemicals. Merck will continue to support those contracts, according to a Merck spokeswoman. The sale is to be completed by Sept. 3, and the facility’s transition back to Merck is expected to take about six months. Merck will also make a decision about the future of Cherokee and its 454 employees as part of an ongoing review of all of its manufacturing operations (C&EN, July 12, page 5).