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Roche to take $1.6 billion charge to close sites in Europe, U.S.

Swiss drugmaker Roche's logo is seen at their headquarters in Basel, Switzerland October 22, 2015. REUTERS/Arnd Wiegmann

ZURICH (Reuters) - Roche (ROG.VX) is to stop manufacturing at four sites in Europe and the United States in a move that could mean up to 1,200 job losses as it addresses "current underutilization" resulting from a changing portfolio of medications.

The Swiss drugmaker's move, to result in restructuring charges of 1.6 billion Swiss francs ($1.6 billion) through 2021, affects locations in Clarecastle, Ireland; Leganes, Spain; Segrate, Italy; and Florence in the United States.

Up to 600 million francs of the charges will be in cash, the company said in a statement on Thursday. It said estimated non-core costs in 2015 are up to 800 million francs, with only a minor cash flow impact for the current year.

Roche said its newer specialized medicines require innovative manufacturing technologies and will be produced in smaller volumes. As a result, it no longer needs the four sites.

Daniel O'Day, chief operating officer of Roche's Pharmaceuticals Division, said the company is hoping to sell the plants, in a bid to reduce job losses.

"We are aware of the impact this decision has on our colleagues, and we will do our utmost to support them during this transition," he said.

Additionally, Roche will spend 300 million francs to strengthen development and launch capabilities for specialized medicines at Kaiseraugst, in its home country of Switzerland.

Roche has been concentrating activities around its Basel headquarters as part of plans to spend 3 billion francs, including on a research and development center, through 2024.

($1 = 1.0010 Swiss francs)

(Reporting by John Miller, editing by Michael Shields and David Evans)