Alex Philippidis Senior News Editor Genetic Engineering & Biotechnology News
1,400 Jobs Eliminated Since January 1; LA Region Pursues Biotech Growth
2015 isn’t even one-quarter over, and already big biopharma has been busy not just sharpening the proverbial axe, but swinging it briskly–the inevitable outcome of all the mergers and acquisitions (M&A) that has reshaped the industry in recent years.
A spot-check by GEN shows plans to cut at least a total 1,400 biopharma jobs have been disclosed in announcements and filings that have surfaced since New Year’s Day. Amgen has reported the largest layoff so far in 2015, confirming plans to shed 300 of the 750 employees based at the former Onyx Therapeutics site in South San Francisco, CA. Amgen acquired Onyx for $10.4 billion in 2013, in a deal that bolstered the buyer’s cancer portfolio with the acquired company’s Kyprolis (carfilzomib).
The 300 ex-Onyx staffers to be eliminated are primarily in commercial positions. The 300 will get to stay through Dec. 31, 2015, with notification by late April about their status beyond this year, company spokesman Cuyler Mayer told GEN.
“Approximately 250 field staff will be retained,” Mayer added.
The fate of the other 200 ex-Onyx staffers, however has yet to be finalized. They include medical staff that Amgen chairman and CEO Robert A. Bradway said last month will be shifted to Amgen’s headquarters in Thousand Oaks, CA, as well as a company research site that is also in South San Francisco.
In a memo to employees, Bradway said the layoffs are part of a consolidation of cancer operations designed to benefit Amgen by combining its scale and immuno-oncology expertise with Onyx's approach to blood malignancies: “These combined oncology capabilities will create the focus and efficiency Amgen requires to progress our vision in oncology, and to remain a world leader for the long term.”
SHIRE: Layoff WARN-ing
Another significant shedding of jobs may occur after Shire relocates its U.S. headquarters from Chesterbrook, PA (Wayne, PA address) to Lexington, MA, where the biotech giant has long kept a sizeable presence.
Shire has submitted a Worker Adjustment and Retraining Notification (WARN) Act notice to officials in Pennsylvania’s Department of Labor and Industry that its move “could result in an employment loss of approximately 500-600” Pennsylvania jobs as a result.
While “more than 500 jobs will transfer to Lexington,” Shire spokeswoman Gwen Fisher told GEN—as the company stated when it announced the move in November—she added the company has yet to decide how many of the remaining positions will be jettisoned.
“There will be some job elimination because of job redundancies and site consolidation,” Fisher added. “But this is not the reason for the relocation. It is a continuation of our One Shire initiative to encourage efficiencies, work optimization and collaboration.” “One Shire” is the company’s global restructuring program, launched in 2013 by CEO Flemming Ornskov, M.D.
Shire will begin in April to shift jobs and operations to Lexington, where it maintained a workforce of 1,350 employees at year’s end, “but the relocation of roles will happen over a period of time, until the end of the first quarter of 2016,” Fisher added.
Starting in 2016, Shire expects to save $25 million a year through the move, which the company says will strengthen collaboration and cross-development by its commercial and R&D staffs.
HIT LIST: Nine companies shed jobs
Shire and Amgen are two of nine biopharmas to disclose job cutting plans during 2015. The other seven companies:
- Novartis will axe 270 workers by 2019 when it shuts down its plant in Humacao, Puerto Rico, which manufactures consumer and animal health products.
- Roche/Genentech has eliminated 170 positions effective February 15 at the Brisbane, CA, site that was the headquarters of InterMune, as JobWatch reported exclusively last month. Roche acquired InterMune for $8.3 billion last year.
- GlaxoSmithKline (GSK) told Pennsylvania officials it will slice 150 R&D jobs in the Philadelphia region, and is separately laying off 135 China-based staffers—about half of whom have protested the job cuts to Chinese labor authorities, Bloomberg reported earlier this month.
- Merck & Co. told Massachusetts officials via WARN Act notice it plans to eliminate 128 R&D positions at the former Cubist site in Lexington, MA. Merck bought Cubist for $9.5 billion cash-and-debt, in a deal completed January 21.
- Sanofi last month began shrinking its cancer R&D. The company has not confirmed how many jobs are being cut, though Elias Zerhouni, M.D., Sanofi’s president, Global R&D, told Bloomberg that about 100 jobs of R&D staffers in North America were slated for elimination.
- Valeant Pharmaceutical Industries told Washington state’s Employment Security Department via WARN Act notice it is eliminating 77 Seattle jobs at Dendreon, which Valeant acquired at auction last month for $495 million. A company spokeswoman at deadline had not answered a GEN query seeking details. Dendreon markets the prostate cancer drug Provenge.
- Pfizer will lay off all 70 workers at a manufacturing plant in Foothill Ranch, CA, one of two sites where the company makes its Emergen-C line of vitamin C products, “To more efficiently support the expected growth of its Emergen-C product line.” Production will be consolidated at the other site in Carlisle, PA. “This was a difficult decision to make because of the impact it will have on our colleagues in Foothill Ranch, Calif., and we are committed to working with them and supporting them throughout this process,” Pfizer said in a statement.
All those cuts don’t include ongoing job reductions announced in past years—such as Merck’s elimination of 8,500 jobs through this year, and AstraZeneca’s shedding of 5,600 positions by 2016.
At least Pfizer has spared some jobs from the proverbial axe. The pharma giant credits strong demand for Lipitor (atorvastatin) in developing countries—where unlike the U.S., it retains exclusivity for the cholesterol-lowering drug—with its decision to retain 160 jobs it planned to eliminate at its Little Island API plant in Ireland.
“While this decision is mainly driven by volume increases for atorvastatin, Little Island’s demonstrated commitment and continued excellence in the manufacturing fundamentals—safety, quality, supply and cost—was also a factor,” Pfizer stated.
GREATER LOS ANGELES: Summit aims to build cluster
With the San Francisco Bay Area to its north and San Diego to its south, the Greater Los Angeles region or “Southland” appears destined to be California’s number-three biocluster. But that doesn’t mean LA and vicinity can’t nurture and build its own successful biopharma presence, say officials and other community leaders.
Leaders recently sought to build momentum—and generate ideas—for growing biopharma in the Southland by organizing the Los Angeles Biotech Summit, held February 26 at University of Southern California (USC). “What Silicon Valley brought to computer technology, Los Angeles can bring to biotechnology: a thriving environment of innovations encompassing academic institutions, training centers, companies and communities,” USC President C. L. Max Nikias, Ph.D., said at the summit.
Dr. Nikias noted the gap between the LA region and California’s two other bioclusters—a gap reflected in LA’s lower ranking in GEN’s recently published list of Top 10 U.S. Biopharma Clusters. Yet he also extolled the region’s virtues: More than 5,000 graduates with science, engineering, and technology degrees; top-tier academic medical centers, including Keck School of Medicine of USC and LAC+USC Medical Center; a concentration of companies, anchored by home-grown Amgen, and several universities—including USC, which plans to develop a biotech park next to its Health Sciences Campus in LA’s Boyle Heights section.
In adjacent Los Angeles County, the Board of Supervisors last year approved a “master plan” for biotech prepared by Battelle Technology Partnership Practice. The plan recommended four initiatives requiring $11 million in one-time capital funding and between $1.8 million and $3.5 million in annual ongoing funding:
- Create a “Fund of Funds” to invest in and encourage venture capital firms to locate in the county, and support commercialization services for entrepreneurs.
- Partner with real estate developers to explore creating three to five “biosciences hubs,” and establish a fund for tenant improvement financing to encourage development of multi-tenant biopharma facilities.
- Create programs to attract new biopharma talent, retain top talent educated at local schools, and improve workforce development.
- Market the county as a place of great bioscience growth potential.