Dendreon Corp., after promising to create 550 jobs for its new Union City drug manufacturing plant -- to qualify for $10.7 million in state and local incentives -- said Wednesday it will lay off 117 workers.
The layoffs, which go into effect Nov. 6, come just weeks after the south Fulton County facility was approved by the Food and Drug Administration.
A Seattle-based company that produces cancer-fighting drugs, Dendreon was believed to have 300 employees at the plant prior to the layoff notice, a spokeswoman for the Georgia Department of Economic Development said.
Dendreon said the Union City cutbacks were part of a nationwide downsizing of about 500 employees. A Georgia Department of Labor filing said the $70 million plant was not closing, and that the employees were nonunion. Company officials would not disclose the number of remaining plant employees.
Dendreon blamed slower progress in marketing its prostate cancer drug, Provenge, and in obtaining approvals for Medicaid reimbursements, for the layoffs. The FDA has approved Provenge, which was to be produced at the Union City plant, Dendreon’s third U.S. manufacturing facility. Dendreon had hoped to generate $1 billion in annual sales of the drug.
The company had qualified for opportunity zone job tax credits of $3,500 per job created; the tax credits are earned only after a job has been created for one year.
If 550 jobs were created, Dendreon would have received $9.6 million in tax credits. It’s unclear if those or other incentives are in jeopardy. The Fulton County Development Authority, which administers the incentives, did not readily return calls for comment.
The layoffs are another blow for Union City, which lost its major mall, Union Station, earlier this year.
Union City Mayor Ralph Moore said Dendreon’s cutbacks are a sign of the economic times.
“Even though Dendreon is part of the health care industry, they aren’t exempt from the effects of this horrid economy,” the mayor said. “They have to make those harsh decisions in order to stay viable.”
