R&D, Restructuring, Workforce

UPDATED: Novartis unveils a new global R&D structure, creating centers in Cambridge, MA and Basel


Novartis is unveiling some big new changes to its R&D organization today, focusing heavily on new research operations based in Cambridge, MA as well as Basel while shuttering two units in China and Switzerland and relocating another from Singapore to the Bay Area.

Hot on the heels of its stunning decision to shut down its cell and gene therapy group while laying off 120, the company plans to tell employees at town hall meetings later today that it is establishing a new early-stage operation along with the creation of two new research centers. Here’s a quick look at the overall plan as outlined by Novartis in response to a query from Endpoints News:

— The pharma giant is setting up an early discovery research group in Basel and Cambridge, MA, which it says will be “integrated with NIBR’s drug discovery teams around the world.” The Chemical Biology and Therapeutics team will merge two existing teams and focus on “harnessing the power of chemical biology and other cutting edge technologies such as CRISPR, DNA-encoded libraries and targeted protein degradation to discover new drug targets. CBT will also include teams focused on pathway biology and high throughput screening.”

— Two new “centers of excellence” for biotherapeutics research in Basel, Switzerland and Cambridge, MA, USA will “explore new directions for delivering biologic therapies.” And the pharma giant says that the development of those two centers will force the closure of a group in Shanghai as well ESBATech, a biologics unit based in Schlieren, Switzerland. Twenty to 25 new positions will be opened in the biologics center of excellence in Basel.

— Novartis is also creating a new research group focusing on discovering new medicines for respiratory diseases while relocating the Novartis Institute for Tropical Diseases (NITD) from Singapore to Emeryville, CA.

Alcon acquired ESBATech and its antibody fragment tech under the watchful eye of Novartis, which was completing its own deal to acquire Alcon, back in 2009. That deal cost $150 million upfront plus another $439 million in milestones. The group reportedly has 73 staffers who are now being axed.

“The Shanghai Biologics group that is closing has 18 people,” a spokesperson for Novartis tells me via email. ” The relocation of NITD programs and operations to Emeryville will affect 84 people in Singapore. In addition to the 20-25 jobs that will be added in Basel for biologics, we will add jobs in Emeryville for NITD and in Cambridge for the Respiratory group. Details on Cambridge and Emeryville jobs are still being worked out.”

Novartis still has big plans for Shanghai, where it’s been building a major R&D operation in the growing Asian biotech hub.

NIBR has a facility in Emeryville, just north of Oakland in the Bay Area. And a whole group of Big Pharmas have been concentrating their forces in the big research hubs like the San Francisco area, including Merck and AstraZeneca. Cambridge, MA, meanwhile, has also benefited greatly from the global migration of Big Pharma to the big hubs, while Basel is home to the multinational company.

Novartis has been focused on a shakeup for much of the year, dating back to its decision to carve out an oncology group in May. Novartis shocked the 400 staffers at its cell and gene therapy group recently when it unexpectedly announced plans to lay off 120 and integrate the remaining players in the cancer research operations. The company is known for one of the biggest research budgets in biopharma, spending $9 billion last year on R&D. But it’s also well known for looking for greater efficiencies wherever they can be found.

That can make job security a risky prospect at Novartis.

“Moving the (Novartis Institute for Tropical Diseases) is really intended to empower the research through the strength of collaborative proximity,” NIBR chief Jay Bradner told the local Singapore press. Novartis doesn’t like to simply fire workers, offering some the chance to relocate or apply for other positions. But clearing the hurdle between Singapore and the Bay Area couldn’t be easy.

This isn’t the first time that Novartis switched up its global R&D structure, and it likely won’t be the last. Big Pharma got real serious about cutting back the head count and outsourcing work several years ago, and practically all of them have taken the ax to their research organizations. Given the anemic flow of new drug approvals this year, there’s no reason to believe that the pressure behind these changes is declining at all.

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