Xellia to Close Copenhagen Antibiotics Plant, Impacting EU Pharmaceutical Production

European Antibiotics Manufacturing Faces Setback

Xellia Pharmaceuticals, Europe's largest and last manufacturer of key antibiotic active pharmaceutical ingredients (APIs), has announced plans to close its Copenhagen production facility. This decision marks a significant blow to the European Union's efforts to reshore pharmaceutical manufacturing and reduce dependency on Asian suppliers.

The Danish drugmaker intends to gradually wind down operations at the Copenhagen plant over the next decade, resulting in the loss of approximately 500 jobs. The closure will see Xellia's anti-infective production moved "outside of Denmark," according to a company press release dated May 6, 2025.

Critical Medicines Production at Risk

The Copenhagen facility currently produces anti-infective APIs and finished dosage forms for serious and often life-threatening conditions. Notably, about half of the products manufactured at this site are included on the EU's list of critical medicines and the World Health Organization's list of essential medicines.

The phased closure will begin with the transfer of production for vancomycin hydrochloride, a crucial antibiotic API. This transfer is expected to be completed by 2028, signaling the start of a broader shift in Xellia's manufacturing strategy.

Industry Challenges and Future Implications

Michael Kocher, Xellia's chief executive, highlighted the underlying challenges facing European pharmaceutical manufacturing. In an interview with The Financial Times, Kocher emphasized that unless European health systems are willing to pay higher prices for generic medicines, more companies may be forced to relocate their operations.

"We are discussing so much about reshoring," Kocher stated. "I think it's just as important to make sure that what we have in Europe stays in Europe."

The closure of Xellia's Copenhagen plant underscores the ongoing struggle between maintaining European pharmaceutical production capabilities and managing economic pressures. Currently, between 60% and 80% of APIs used in the EU are sourced from China and India, according to the Mercator Institute for China Studies. This latest development may further increase Europe's reliance on Asian manufacturers for critical pharmaceutical ingredients.

As Xellia explores "several potential locations" for future production, including sites beyond its current manufacturing network, the company's decision reflects broader industry trends of consolidation and globalization in response to pricing pressures, rising operational costs, and fierce competition in the anti-infectives market.