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Vertex is reorganizing and consolidating R&D, shuttering a site in Canada

Vertex has pulled out the ax in a move to chop down the size of its R&D operation.

The big biotech noted in its 10-K that the company decided last month to shutter a research site in Canada while “consolidating” R&D in three locations scattered across the country. And company sources tell me that there have been a number of recent cuts as well in the hometown R&D group in Boston stretching back over the past year.

From the 10-K: “In February 2017, we decided to consolidate our research activities into our Boston, Milton Park and San Diego locations and are in the process of closing our research site in Canada.”

A spokesperson for the company confirmed the consolidation to me, saying that it had already been announced, and added that “we will continue to invest significantly in scientific innovation.”

“There were no layoffs in Boston research,” the spokesperson added later. “Our plan is to continue to increase the number of people in our research organization.”

Vertex staffers, though, tell me that there were some layoffs in the Boston R&D organization, though there were “not many.” The cuts were mainly aimed at the “Old Guard, from what I saw,” one added. The last round accounted for “only ten or twelve,” I’m told, “but there have been others over the last year or so.”

They asked not to be identified, as they weren’t authorized to speak on the cuts.

A former Vertex staffer told me, also anonymously, that the company frequently used such “stealth layoffs” to root out 10 to 15 research staffers in particular groups at a time. None of them were announced, as new hires were brought in and the overall headcount didn’t drop.

That’s the exact same strategy that Biogen staffers laid out to me a few years ago.

Fan Pier Vertex Pharmaceuticals Laboratory Research/Headquarters, 50 Northern Avenue (Turner Construction Company)


R&D disruption is the order of the day in well-established biopharma companies. Merck, AstraZeneca and Amgen are all going through the latest restructurings, following huge cuts within the last few years. In most cases, these companies are shuttering outlying operations and concentrating forces in their top hubs.

Vertex, which is carefully focused on cystic fibrosis, is a bellwether company in the big Boston hub. Just a few months ago Vertex sold off a slate of cancer therapies to Merck KGaA for $230 million upfront. Merck KGaA took over programs on an ataxia telangiectasia and Rad3 related (ATR) protein kinase inhibitor program — covering VX-970 and VX-803 – as well as a DNA-dependent protein kinase (DNA-PK) inhibitor program for VX-984.

Last summer Vertex also scrapped a late-stage study using a combination of VX-661 and its all important cystic fibrosis drug Kalydeco (ivacaftor) in people with one copy of the F508del mutation and one copy of a mutation that results in minimal CFTR protein function (F508del het/min). The study stumbled in its first phase, without an improvement in lung function.

VX-661 is Vertex’s second-gen corrector, a successor to the first-gen corrector lumacaftor, included in the drug combination for Orkambi. Two third-gen correctors, VX-152 and VX-440, have been in early-stage studies as Vertex plumbs new approaches that can treat CF better than Orkambi, which has suffered a high dropout rate. The treatment targets the underlying genetic cause of the disease.


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