{"id":117484,"date":"2026-08-19T15:18:14","date_gmt":"2026-08-19T15:18:14","guid":{"rendered":"https:\/\/www.europesays.com\/ch\/117484\/"},"modified":"2026-08-19T15:18:14","modified_gmt":"2026-08-19T15:18:14","slug":"novartis-in-plant-contract-dispute-with-chinese-cdmo-porton","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ch\/117484\/","title":{"rendered":"Novartis in plant contract dispute with Chinese CDMO Porton"},"content":{"rendered":"

A Novartis cross-border partnership is turning into a standoff. The Swiss pharma has unilaterally terminated a plant leasing contract with Chinese CDMO Porton Pharma Solutions following a regulatory hiccup.<\/p>\n

Porton disclosed the dispute in a May 13 release<\/a> (Chinese, PDF). Along with an eviction notice that took effect immediately, Novartis said it reserves the right to press for 54.7 million euros (about $63.7 million) in potential damages and service charges, according to Porton, which is not to be confused with Porton Biopharma, a spin-out from Public Health England.<\/p>\n

Porton said it does not agree with Novartis\u2019 stance and that it remains in communications and negotiations with the Swiss pharma. But the Chinese CDMO warns that the fallout may escalate into legal proceedings and that an unfavorable outcome may have \u201ca material adverse impact\u201d on the company\u2019s financials for 2026.<\/p>\n

The dispute centers on a manufacturing hub located at Novartis\u2019 Menge\u0161 campus in Slovenia.<\/p>\n

Through a series of agreements signed<\/a> with Novartis back in 2022, Porton was planning to invest 50 million euros to establish R&D and manufacturing facilities at the Slovenian site. The goal was to provide services around process development for GMP intermediates and active pharmaceutical ingredients, development of analytical methods, and large-scale production throughout a drug\u2019s life cycle.\u00a0<\/p>\n

At the time, Porton\u2019s Chairman and CEO, Oliver Ju, highlighted Menge\u0161 as the company\u2019s first R&D and manufacturing site in Europe.<\/p>\n

\u201cIn line with our strategy, the investment in [the] Menge\u0161 facility will enable us to expand our offerings of drug substance in Europe and is an important milestone for Porton\u2019s global layout,\u201d he said in a statement in August 2022.<\/p>\n

In May 2024, Porton successfully opened its \u201cB31\u201d R&D facility. Then in December 2025, construction work on the main \u201cB30\u201d production building was completed.\u00a0<\/p>\n

However, during the build-out, Porton said it found some \u201cregulatory issues\u201d tied to B30\u2019s early paperwork, which would preclude the company from using the factory for its planned purposes.\u00a0<\/p>\n

Porton reached out to Novartis, which, alongside its designated entities, assisted in the regulatory approval process. But \u201csignificant disputes and disagreements remain\u201d between the two parties today, Porton said.\u00a0<\/p>\n

\u201cOut of caution, the company has temporarily suspended the investment and construction progress of B30,\u201d Porton said.\u00a0<\/p>\n

Novartis, conversely, viewed the halt as a material breach of contract. Apparently deadlocked in their negotiations, Novartis unilaterally terminated the project and demanded that Porton vacate the facility within 90 days.\u00a0<\/p>\n

As of the disclosure date of May 13, Porton said it has not received any formal lawsuit from Novartis but said the firm will protect its interest if it comes to that.<\/p>\n

Losing the\u00a0Menge\u0161 facility would deal a major blow to Porton, which was put on the map<\/a> in 2022 by a major contract to manufacture Pfizer\u2019s COVID-19 oral drug Paxlovid. As of the end of 2025, the Chinese CDMO had spent 447.6 million Chinese yuan ($65.8 million) on the construction of the facility, according to the company\u2019s 2025 annual report.\u00a0<\/p>\n

If the two parties fail to resolve the dispute, Porton warns of potential major impairment charges on the infrastructure left behind, as well as potential contract defaults with clients and employee severance costs.<\/p>\n

Novartis\u2019 potential $64.7 million legal claims would also be a huge burden on Porton, which recorded 3.4 billion yuan (about $500 million) in 2025 revenue, with less than 100 million yuan ($63 million) in net income attributable to the parent company.<\/p>\n","protected":false},"excerpt":{"rendered":"A Novartis cross-border partnership is turning into a standoff. The Swiss pharma has unilaterally terminated a plant leasing…\n","protected":false},"author":2,"featured_media":117485,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[127],"tags":[190,51816,57213,8761,41939,228,206,2536],"class_list":["post-117484","post","type-post","status-publish","format-standard","has-post-thumbnail","category-novartis","tag-asia","tag-cdmo","tag-contract-disputes","tag-contract-manufacturing","tag-fierce-pharma-homepage","tag-manufacturing","tag-novartis","tag-pharma"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ch\/117122846710181257","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/117484","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/comments?post=117484"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/117484\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media\/117485"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media?parent=117484"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/categories?post=117484"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/tags?post=117484"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}