Group AG said Europe’s medicines regulator is proposing to pull amoxicillin from its list of critical medicines, a potential death blow to the last European factory to make the antibiotic from scratch.

Removing the medicine, which is part of the penicillin family, from the list would expose Swiss drugmaker Sandoz to even greater competition from Chinese and Indian rivals.

“We’re now literally on one minute to midnight to deciding whether we continue to stay in Europe making penicillin,” Chief Executive Officer Richard Saynor said in an interview.

Amoxicillin is used to treat everything from pneumonia to skin infections. Sandoz’s plant in Kundl, Austria, is the last one on the continent to make penicillin from start to finish, producing basic ingredients for antibiotics as well as finished doses.

Shares of Sandoz, which also reported lower-than-expected third-quarter sales and a cut to its annual sales guidance, dropped as much as 8.3% on Wednesday, the most on record. The stock is up 42% so far this year.

Less than three years ago, Sandoz received some €50 million ($56 million) of public funding to help modernize the Kundl factory with the aim of reducing reliance on antibiotics suppliers in China and India following a shortage that began in late 2022 and resolved in mid-2025.

When the factory expansion opened, Sandoz said it could produce 240 million packages per year. But a flood of cheaper antibiotics from China and India since then means the Swiss drugmaker has struggled to reach full capacity.

The plant, with a size sufficient to supply most of Europe and North America, is currently only operating at just over half of its capacity, said Saynor, who has long bemoaned the fact that antibiotics cost less than a packet of sweets and called on European governments to protect local manufacturing.

Out of 16 sites around the world that ferment two crucial starting materials for penicillin, 11 are in China and none in the US, according to Qyobo GmbH, a Munich-based pharmaceutical industry data provider.

Sandoz’s Kundl factory is the only large plant outside of China that’s able to ferment and produce a crucial amoxicillin precursor called APA-6 for regulated markets, Qyobo said. Meanwhile, prices for the type of active pharmaceutical ingredient, or API, used in injectable amoxicillin have plunged 56% since January of last year, close to an all-time low.

“If Europe says it’s perfectly Ok for you to go and buy Chinese API, why should we be penalized as a business for manufacturing a product in Europe when all of our competitors effectively can buy heavily subsidized drug substance from China?”Saynor said. “I think that’s wrong.”

Sandoz filed an anti-dumping complaint with the European Commission in May over Chinese imports of amoxicillin, saying the situation had reached a “breaking point” and there needed to be a “level playing field for the industry.”The European Union is in the final stages of adopting regulations to incentivize local production for medicines deemed to be critical. The idea is to allow public procurement to put emphasis on local production, not just the lowest price.

Deliberations on the list of critical medicines are scheduled to continue through next month. The European Medicines Agency didn’t reply to a request for comment.