Alex Philippidis Senior News Editor Genetic Engineering & Biotechnology News
Pace of job cuts in January surpasses 2013, when 22K positions were axed.
Biotech and pharmaceutical companies in January disclosed plans to cut 906 jobs—73% more than the same month a year earlier, according to data released February 6 by global outplacement consultancy Challenger Gray & Christmas. January was worse than all of 2013, which saw a 57% jump in job cuts over 2012, to 22,161 from 14,150.
The slump reflects pharma’s continued retreat from vertical integration following patent-cliff losses, plus rising costs associated with healthcare reform, the still-sluggish U.S. economy, and continued pressure from overseas regulators to contain drug prices, Challenger Gray & Christmas CEO John Challenger told GEN.
“If you’re talking about the researchers, they probably will stay in the field,” whether in industry or academia, Challenger said. That outcome, he added, is less likely for displaced workers with business backgrounds, whose skills are more adaptable to numerous industries: “We see about 35–40% of people stay within their industry, and the other two-thirds go outside their industry. If you come out of finance or human resources or sales and marketing or distribution, management, operations and inventory, those people don’t necessarily stay or need to stay in biopharma.”
He added that smaller biotechs continue to outgrow the biopharma giants. Last month, Novartis announced plans to shutter its Suffern, NY, plant by 2017, affecting some 525 employees; and axe 500 pharma support jobs while creating an equivalent number of research and manufacturing positions, all in Switzerland.
Also in January, Amgen confirmed it will lay off by April 30 160 U.S. corporate and support employees—about half from Amgen’s Thousand Oaks, CA, headquarters, with the rest scattered nationwide in field-based positions. Earlier this month, AstraZeneca said it will idle 550 additional workers by 2016.
Since the second quarter of 2012, the percentage of biopharma employees believing their companies will perform worse in the next six months has risen—from 17% to 25% in January 2014, according to the periodic Biotech & Pharmaceutical Business Outlook Ratings survey by global online career community Glassdoor. The percentage thinking their companies will perform better fell to 38% from 49%.
SALIX PHARMA: 200 Ex-Santarus Jobs Axed
Speaking with analysts the day her company said it will acquire Santarus for $2.6 billion, Salix Pharmaceuticals President and CEO Carolyn J. Logan said her company looked forward to “the combined company-creating opportunities for significant revenue synergies” wrought by the deal.
Salix has begun fleshing out those synergies, and California appears to be the big loser. The developer of drugs and devices to fight gastrointestinal diseases company recently disclosed plans to lay off 200 employees effective March 6 at the San Diego site that was Santarus’ home before Salix’ deal for Santarus closed in January.
According to a WARN Act filing with California’s Employment Development Department, Salix will eliminate staffers holding any of 50 managerial and administrative job titles. Among positions eliminated were its evp for research and development, seven district sales managers, four executive assistants, two directors and two managers of QA and compliance, and two sales training managers.
“Salix will be discontinuing substantially all of Santarus’ operations in the state of California,” the company told state officials in the filing.
It could not be learned if the layoffs reflected all or part of Salix’ inherited workforce in San Diego. Salix’s press contact—G. Michael Freeman, avp, investor relations & corporate communications—at deadline at not responded to emailed questions from GEN. As of January 31, 2013, Santarus based 290 employees in San Diego, where it leased 40,000 square feet at 3611 Valley Centre Drive.
SCOTLAND: Industrial Bio Center Eyes 1,500 Jobs
Scotland biotech may be best-known for Dolly the Sheep, but a coalition of institutions and businesses is working to raise £55 million ($91 million) in public and private funds to show the country can also be a global leader in industrial biotechnology capable of creating 1,500 jobs by 2017.
The new Industrial Biotechnology Innovation Centre (IBioIC) will be based at the University of Strathclyde, which will coordinate activity from all 13 Scottish higher-education institutions active in biotech research. Founding companies are GlaxoSmithKline, global chemicals giant Ineos, and Edinburgh-based Ingenza, which applies synthetic biology to industrial processes and products.
IBioIC CEO Roger Kilburn told GEN the center is actively supported by more than 30 companies, from startups to multinationals—and will engage with all biotech activity in Scotland, not only industrial or white biotechnology, but agricultural (green), marine (blue) biotech, and human health (red).
“Its role is one of accelerating the development of a manufacturing base using biotechnology,” Kilburn said Wednesday. “Biotechnology is a very fast developing science and potential disrupting technology. However, there are significant technical and engineering hurdles to overcome to enable the widespread industrialization of this technology beyond high-value pharmaceutical applications.”
Through knowledge exchange and access to research and skills programs, IBioIC plans to help members accelerate their commercialization of biotechnologies.
The projected 1,500 jobs include research activities, resultant manufacturing industry enabled by IBioIC, and indirect jobs created as a result. While research jobs will likely be both public and private, all manufacturing and indirect jobs are expected to be private-sector.
IBioIC won a first investment of £10 million (about $17 million) from the Scottish Funding Council. Another £45 million (about $75 million) is expected from member contributions and government funding agencies such as Research Councils UK, the Technology Strategy Board, and the European Union’s Horizon 2020.
In November 2013, Scottish Enterprise launched its National Plan for Industrial Biotechnology, aimed at developing a £900 million ($1.5 billion) industry by 2025.
“IBioIC is a key and integral part of delivering this strategy,” Kilburn said.