POWELL — Less than two years ago, Cody Laboratories was home to 135 higher-paying jobs, planning a massive expansion and praised by local and state leaders as an example of how Wyoming could diversify its economy. But by the end of this summer, the pharmaceutical manufacturer will cease operations and close its doors.
Representatives from Philadelphia-based Lannett Company, which owns Cody Labs, broke the news to employees on Tuesday. Lannett officials said the dozens of workers will be laid off in three phases: at the end of June, in early August and late September. A handful of the 80 to 85 current employees may stay on longer to help wind down the operation, the economic development group Forward Cody was told.
In a statement, Lannett spokesman Robert Jaffe called the closure a “difficult” decision. He said all Cody employees are being offered a “generous” severance package and help with finding new jobs.
A few years ago, Lannett had seen Cody Labs and the profitable pain-killing medications it made as being “at the core” of the company’s future. However, that changed as the Lannett began focusing on paying off its substantial debts — and as pain-killing opioids fell out of favor. The rising number of overdose deaths involving the potentially dangerous narcotics have led public health officials and politicians across the country to declare an “opioid crisis.”
Lannett halted its planned expansion in Cody early last year, laid off 50 workers over the summer of 2018 and then announced in October that it was putting Cody Labs up for sale.
However, Jaffe said Lannett has been unable to find anyone interested in continuing to operate the business. He indicated that the buyers currently in the running to purchase Cody Labs are only interested in its assets. That prompted Tuesday’s announcement that the facility is being decommissioned.
“We tried to find buyers and, largely due to the opioid crisis, there are not buyers lining up for this business,” Jaffe said of Cody Labs. “So it wasn’t for lack of trying, it was that the potential buyers at this particular point in time are interested in the assets; they’re not interested in the business. But we certainly tried very hard to sell it as a business.”
Beyond being a blow to the local economy and the dozens of employees who will now have to find other jobs — perhaps in places outside of Cody — the closure is also a setback to efforts to diversify Wyoming’s economy.
Seeing it as a unique opportunity, the State of Wyoming provided a multi-million grant and had agreed to loan tens of millions of dollars to help Cody Labs grow. Forward Cody CEO James Klessens spent years lobbying elected officials on the business’s behalf and the Wyoming Legislature created a large loan program with Cody Labs specifically in mind.
Klessens soured on Lannett more recently, as the company abandoned its plans to expand in Cody and shared little information. However, he was still caught off-guard by this week’s announcement that the company would simply shut down.
“Maybe we should have expected it a little more, but I think deep down you don’t want to believe something like this can happen,” he said Wednesday.
Klessens called the loss of jobs “tragically sad.” He noted the local people who put their energy, heart, soul and passion into building up the company now “trying to figure out what to do with their lives.”
As Lannett sought a buyer for Cody Labs over the past eight months, Klessens said he was assured that multiple buyers were looking at the business, but he wasn’t offered details.
By CJ Baker
Powell Tribune Via Wyoming News Exchange