Restructuring

Novartis joins the Big Pharma exodus out of antibiotics, dumping research, cutting 140 and out-licensing programs

Another Big Pharma is retreating from the antibiotics field.

Novartis today says its early-stage research group at NIBR is dropping antibacterial and antiviral research programs based in Emeryville, CA. And they’re doing it at a time that drug-resistant strains of bacteria are spreading around the world — an issue that once commanded considerable attention at Novartis.

The reorganization will trigger the layoff of about 140 staffers. Novartis noted:

The groups that are impacted in their entirety are antibacterial and antiviral research. As a result, other groups are also affected including, Pharmacology, Protein Sciences, Project Management and global support functions in Global Discovery Chemistry, NIBR Informatics, Scientific Opertions and Translational Medicine. About 150 employees will remain in the San Francisco Bay Area in support of NITD and our drug discovery efforts.

On the chopping block are a group of preclinical programs as well as LYS228, their clinical-stage effort in the field. Most of the affected staffers will have a 60-day period to work out their departure, with severance, while a small group will stay on to handle the shutdown.

Novartis added:

While the science for these programs is compelling, we have decided to prioritize our resources in other areas where we believe we are better positioned to develop innovative medicines that will have a positive impact for patients. The need for these types of medicines is clear and to maximize the chances that these programs will one day help patients we are actively engaged in out-licensing discussions with companies focused on developing medicines in these areas.

This isn’t the first time NIBR has reorganized. There was a considerable revamp shortly after Jay Bradner took the reins at the institutes. And Novartis itself is known for a restless search for cost cuts wherever it can find them — which triggered their decision to scrap a special gene and cell therapy unit and intergrate the group in the main development organization. 

Pharma started bailing on antibiotics research years ago, discouraged by the notable absence of profits as generics dominated treatment. That left R&D to a small group of biotechs looking to come up with new approaches that could be used as drug-resistance become increasingly common.

The surviving players will now get a chance to pick over what is being scrapped now, just as AstraZeneca once tried to sell of their unit near Boston — until they were forced to finally spin it off as a new company.


Image: Jay Bradner, President of the Novartis Institutes for BioMedical Research, speaks at an Endpoints News event in San Francisco, January 2018 — Jeff Rumans Endpoints News


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