Alex Philippidis Senior News Editor Genetic Engineering & Biotechnology News
Number of announced layoffs more than doubles in October, and continues this month.
The number of U.S. biopharma layoffs announced this year through October has nearly doubled from a year ago. According to a new report by Challenger Gray & Christmas, biopharmas disclosed plans to cut 10,585 jobs, more than double the 8,922 announced during the previous nine months of 2013. That resulted in a total 19,507 biopharma jobs disappearing in 2013 as of October 31, 68% above the 11,586 job cuts announced from January–October 2012.
Merck led the parade with an R&D overhaul that will eliminate 8,500 positions by 2015. Boehringer Ingelheim began shutting its troubled Ben Venue Laboratories plant in Bedford, OH, idling all 1,100 workers. Then there were smaller layoffs at Delcath Systems (21 jobs, 33% of workforce), and Amarin (half its staff, size not disclosed but numbered 111 at the end of 2012).
Challenger Gray did not include overseas cuts, which in October included H. Lundbeck’s slicing up to 200 positions over two years. Teva planned to cut 5,000 jobs worldwide by 2014, but backtracked after political opposition arose in Israel.
Layoff numbers keep growing. As of November 13, Novartis is dropping a net 325 R&D jobs; Actavis is closing its Lincolnton, NC, manufacturing plant, idling all 310 workers; Dendreon will ax some 200 staffers; Shire will cut 180 R&D jobs in Basingstoke, U.K.; Ariad Pharmaceuticals will jettison 160 workers, about 40% of its staff; Bristol-Myers Squibb last week confirmed plans to cut about 75 U.S. R&D jobs; and Transcept Pharmaceuticals, six staffers totaling 43% of workforce.
Add the 1,076 additional U.S. job cuts (1,256 overall) already this month, and January–November will exceed 20,000 jobs, vs. 12,886 a year earlier.
“Like clockwork every year, they wait until right around the holiday season to announce their layoffs. They’ve done their numbers, they realize what they’re going to need going forward, and they need to adjust to make their budgets as fiscally sound as possible,” Clifford S. Mintz, Ph.D., founder of the biopharma education and training organization BioInsights, told GEN.
Merck was different, he added, given its need to reverse years of R&D setbacks.
Dr. Mintz, who also publishes BioJobsBlog, said 2013 job losses were no worse than recent years. Challenger Gray numbers reflect that: The industry lost 20,251 jobs during January–November 2011; and 50,168 from January–November 2010.
Displaced workers will find it tough to find new biopharma jobs—especially R&D, as more work is shifted overseas. Dr. Mintz said the U.S. job picture is complicated by academia’s continuing to churn out basic research Ph.D.’s while industry needs more specialized staff: “The bad news is, most of the people that are receiving Ph.D. degrees today have no training, skills, or any value to pharmaceutical and biotech companies these days, at least the big guys.”
Even worse, Mintz added, the layoffs occur just before the year’s most festive season: “I find it particularly offensive that they’re going to lay people off right before the holidays. Can you think of a worse time to lay those people off?”
STARTUPS: Industry Touts Bill as Rx for Biopharma Jobs
The Biotechnology Industry Organization (BIO) and a startup CEO are among supporters of a U.S. Senate bill they predict will create thousands of new jobs.
The Startup Jobs and Innovation Act (S.1658), introduced November 6 and referred to the Senate Finance Committee, would allow small companies to join their investors in forming “R&D Partnership Structures” that offset investors’ taxable income with the startup’s losses and credits generated by R&D. Eligible are prerevenue startups with fewer than 250 employees, less than $150 million in gross assets, and a significant percentage of expenses in R&D.
The bill would also extend capital gains tax reductions to investors in startups with gross assets of up to $150 million—triple the current asset limit.
Sens. Robert Menendez (D-NJ) and Pat Toomey (R-PA) introduced the bill, which at deadline had no companion measure in the House of Representatives.
A study commissioned by the Coalition of Small Business Innovators (CSBI)—whose 18 members include BIO and the Association of Clinical Research Organizations—concluded that reviving R&D partnerships would create 156,000 jobs and stoke $10.3 billion in new annual investment across industries.
“What that means for me is the ability to move faster with our trials, to do a better job, to focus on science versus fundraising and generating capital,” Jeff Hatfield, CEO of Vitae Pharmaceuticals, said November 6.
Hatfield expects many CEOs would use the measure: “That will relate to better progress in science, more jobs, and more capital to do things.”
Vitae is a 50-person developer of small molecule treatments for chronic kidney disease, diabetes, atherosclerosis, Alzheimer’s disease, and autoimmune disorders.
“As tough as that fight is, to solve these diseases that have plagued mankind for so many years, it’s as big a fight or maybe even a more significant and threatening fight to simply find the capital to do that work,” Hatfield said.