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Merck rebuying its former drug ingredient factory

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TRTENTON, N.J. — Drugmaker Merck & Co. has agreed to buy back a central Pennsylvania factory from the contract manufacturer that bought it 2 1/2 years ago.

Merck said Tuesday the company, PRWT Services Inc., asked Merck to repurchase the Cherokee Pharmaceuticals plant so it could refocus on its core business amid a challenging time in the pharmaceutical industry. The plant makes active ingredients for prescription medicines, along with agricultural chemicals and other products.

Merck agreed to the repurchase because it gets a key active ingredient for a medicine from that factory.

"They do make a product that's critical to our supply chain," spokesman Ron Rogers said. "That's very important to our business and, more importantly, to our customers."

He said the sale should be completed by Sept. 3; terms were not disclosed. Merck will then take about six months to decide the future of the factory, about 80 miles northwest of Philadelphia, and its 454 employees.

"We need first to gain a fuller picture of the current manufacturing portfolio, as well as the capacity and the financials," Rogers said, and the plant will continue its current production in the meantime.

Merck owned the factory for roughly 60 years before selling it to Philadelphia-based PRWT, a contract manager that also does document processing, facilities management and other services meant to save customers money, according to its Web site.

A spokeswoman for PRWT did not immediately return a call seeking comment.

In afternoon trading, Merck shares were up 51 cents at $35.87.

The deal comes as Merck continues streamlining operations since buying fellow drugmaker Schering-Plough Corp. for $41 billion last November.

In July, Merck said it will close or sell eight factories and eight research sites around the world. With the repurchase of the Cherokee Pharmaceuticals plant, it will have 78 manufacturing sites.

Merck also0 has eliminated about 21,000 people from the combined Merck and Schering-Plough work force, leaving about 95,000 people.