With the Takeda/Shire merger underway, the big question now is whether the older acquirer can combine the two R&D organizations without the kind of disruption that has marked past deals involving big players. I discussed that recently with Andy Plump, the R&D chief who will have to see to the details. And Takeda CEO Christophe Weber is clearly backing a swift resolution.
According to the news wire, Weber wants to quickly move to chop out programs that don’t make the cut on innovation.
“It’s really important that we don’t waste resource on assets that are moderately innovative,” Weber told Reuters. “When you combine two pipelines you can be more stringent.”
But he also noted that cutting doesn’t have to be a brutal procedure. Takeda has spun out 10 companies rather than just dump efforts. And Plump has been promising that same kind of delicate approach as he looks at some R&D areas — like ophthalmology — and locations that fall outside their sweet spot.
Maintaining that position, though, could be difficult, particularly in the Boston/Cambridge area, where competition for talent is high.
“They are cutting quite deep in R&D and it is not clear if the amount of money they are saving is going to be beneficial or harmful,” John Rountree, a partner at pharmaceutical strategy consulting firm Novasecta, told Reuters. “Merging R&D is never easy. There are going to be lay-offs and that creates uncertainty and disruption and sometimes the best talent just leaves.”
Even under the best of circumstances, this won’t be easy.
Takeda spent about $2.85 billion on research in the past year, while Shire racked up $1.7 billion in costs during 2017. Together, Plump will be handed a group with collective costs of a little more than $4.5 billion, with a goal to cut that by about $600 million. Based on their layoff plans outlined today, that will cost roughly 1,000 jobs.
Image: Christophe Weber. AP IMAGES
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