Business, Workforce

Merck triggers a new round of layoffs in R&D reorganization, pushing more jobs into Cambridge, San Francisco

Merck is confirming that it’s triggered a new round of layoffs in its R&D group as it concentrates and expands its drug research work in two major biotech hubs, Cambridge, MA and San Francisco. The restructuring includes adding a new lab in Cambridge, which will focus on the fast-growing microbiome field.

A spokesperson for Merck tells me:

“Within Merck Research Laboratories, we are making some organizational changes within our discovery, pre-clinical and early development area to enable earlier access to emerging external science and technology to augment our leading discovery and development capabilities. These changes include increasing our investment in exploratory biology in areas where biomedical research is converging, specifically in Cambridge, Mass. and the San Francisco Bay area, Calif.  Unfortunately, these changes will result in workforce reductions at our Kenilworth and Rahway, N.J. sites and our North Wales, Pa. screening facility as we shift resources and personnel.

“Additionally, here’s some background on Cambridge and the San Francisco Bay area sites:

“We are expanding MRL’s early discovery research capabilities by investing in new laboratories at our Cambridge, Mass. site. Research will focus on emerging science, agnostic of therapeutic area. Initial exploratory research will include host-pathogen interactions and the role of the microbiome in disease processes. The site is scheduled to open in late 2016.”

The spokesperson declined to specify exactly how many jobs are being cut. “We’re not providing a breakdown of the changes or specific numbers at this time, as it will include separations and moves,” she noted.

Merck’s move follows a major trend in biopharma R&D, as the biggest companies concentrate more and more of their work in the big hubs. And virtually all of the major players have downsized at one time or another.

Close to three years ago, Merck triggered a major reorganization in its R&D ranks, as the then new R&D chief Roger Perlmutter set in motion a plan that involved 8,500 layoffs, all of which were piled on a restructuring effort that was announced earlier.

Those layoffs followed a years-long gap in significant new drug approvals and a string of clinical setbacks. Since then, though, Merck landed a landmark approval of Keytruda, now the number two checkpoint inhibitor on the blockbuster cancer market, along with an OK early this year for its hep C combo, Zepatier, which is being sold in a rival-infested field.

Derek Lowe at In the Pipeline, a closely followed blog that has frequently been a leader in flagging scuttlebutt about R&D reorganizations, was the first to spotlight rumors of a move. He reported:

The North Wales, PA site is being closed (the screening operations there are moving to Kenilworth). New Jersey discovery chemistry (Kenilworth and Rahway) is being cut by 20%, and Rahway’s med-chem is entirely moving to Kenilworth over the next few months. Disease area biology in Kenilworth is shutting down (not sure what the ramifications of that one might be). I’m told that some people will be offered a chance to move to the Boston or Bay area sites, and all of these decisions will be made by the end of September. And apparently they’ve also told everyone that more changes will be coming in the next few weeks, so I’m sure that’s calmed everything down as well.

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