Alex Philippidis Senior News Editor Genetic Engineering & Biotechnology News
Illumina Moving 250 to Foster City; InterMune Cuts Jobs; Moderna Adding about 100 Jobs This Year
They say no news is good news, but the same might also apply to less bad news than last year, at least where biopharma jobs are concerned.
The industry finished 2014 with a total 17,636 announced jobs cuts—down 20% from 22,161 in 2013, according to the December Job Cut Report of Challenger, Gray & Christmas.
The slide reflected job growth among biotechs driven by new product launches, and less cost-cutting by big biopharma. Not to say there weren’t big layoffs: Amgen will chop 3,500 to 4,000 positions by the end of 2015. Allergan said its planned $66 billion acquisition by Actavis won’t change earlier plans to lay off about 1,500 employees over five years. And AstraZeneca slated another 550 jobs for elimination by 2016.
The drop also reflected the biopharma industry stabilizing after the sluggish recovery that followed the 2007–09 recession, which was more than offset by disruptions. These ranged from consolidation and layoffs by pharma giants, to the overhauls of the nation’s patent laws and healthcare system, John A. Challenger, CEO of Challenger, Gray & Christmas, told GEN.
“Those forces were so strong that they outweighed some of the economic conditions. It does seem like this past year, a large portion of that restructuring that occurred in big pharma had been completed, so that there was less pressure to do that. I do think the pressure relented some,” Challenger said. “Generally, the economy is strong. Biotechs are growing. Healthy sectors like pharma have lots of small companies. They’re not just dominated by big old-line companies. So by definition, it’s a healthy sector because of all that new growth that keeps on occurring, and all the venture money that has been flowing into healthcare.”
Biopharmas can be expected to continue picking up the pace of hiring in 2015, Challenger added, as the U.S. economy picks up steam, more new products reach the market, and demand for drugs grows due to aging populations in the U.S., Western Europe, and Japan: “2015 should be relatively benign in terms of layoffs and relatively strong in terms of job growth.”
ILLUMINA: 250 Moving to Foster City
Illumina will move about half its San Francisco Bay Area workforce to its future site in Foster City, CA. The sequencing giant signed a 15-year lease for 360,000 square feet of build-to-suit space for offices, labs, manufacturing, amenities, and parking at the roughly 20-acre Lincoln Centre campus, owner BioMed Realty Trust said.
“In the initial phases, we’ll be looking at relocating about 250 employees from different existing facilities in the region, and roughly 100 of those would be manufacturing employees,” Chuck Pappalardo, senior director of global facilities and real estate, told the City Council on Tuesday, according to a video of the meeting. “We’re currently looking to have the first 200,000 square feet of that 360,000 in or around mid-2017, with the additional 160,000 square feet in mid-2018.”
Illumina employs about 500 people in the Bay Area, Paul Bianchi, Illumina’s svp-human resources, told the council—part of a global workforce of about 4,000 employees and hundreds of contingent workers. That’s nearly double the workforce of 2,200 in September 2012, when he joined the company: “If there is a key word here, it’s about growth.”
The company will shift to Foster City operations now in Hayward, Redwood City, and Santa Clara—while retaining a fourth Bay Area site at San Francisco’s Mission Bay campus. There, Illumina operates an R&D facility and last year launched its Illumina Accelerator Program, which selected its first companies in October.
Illumina has an option for another 160,000 square feet at Lincoln Centre.
In return for the new jobs, Foster City officials plan to reimburse Illumina for fees “in connection with processing and approval of entitlements and permits for development and construction of the project.”
“The total amount is estimated to be between $3 million and $3.5 million,” City Manager James C. Hardy wrote to the council, based on a projection by city staff. Illumina would be reimbursed the approximately $700,000 per year in sales and use taxes it estimates will be paid to the city by virtue of Illumina being in Foster City.
“Assuming the Incentive Payment Cap was $3.5 million and the Incentive Payments were $700,000 per year, it would take five years for Illumina to be fully reimbursed,” Hardy added.
The tax break is part of an Economic Development Incentive Agreement set to be formalized by June 30. Earlier this week, the council unanimously approved a resolution to write the agreement.
INTERMUNE: 170 Jobs Eliminated
A day after revealing plans to acquire InterMune for $8.3 billion, Roche downplayed the possibility of cost-cutting: “This is not about cost synergies at all. This is a growth story,” Roche CEO Severin Schwan told Forbes, pledging to keep InterMune’s workforce as intact as possible.
A recent filing with California’s Economic Development Department (EDD) tells the rest of the story.
In a Worker Adjustment and Retraining Notification (WARN) Act notice dated December 10, 2014, and received by EDD on December 19, InterMune disclosed plans to eliminate 170 positions effective February 15 at the Brisbane, CA, site that was its headquarters. That would be more than one-third (38%) of InterMune’s approximately 450 employees on August 24, 2014, when Roche said it was acquiring the company—and nearly all the approximately 200 InterMune staffers based in Brisbane, just 3 miles north of the South San Francisco offices of another Roche subsidiary, Genentech.
“Roles in several functions that have been found to be duplicative with Genentech's roles have been eliminated,” Genentech spokesman Terence Hurley told GEN. “Internal teams at Genentech have been working to map U.S. InterMune employees into similar positions at Genentech whenever possible. However, in many cases, if a position is not deemed comparable, we have opted to eliminate the position, which provides for a comprehensive severance package to those impacted.
According to an August 25, 2014, presentation made to InterMune staffers, “ALL (emphasis in original) InterMune employees are guaranteed their comparable aggregate target compensation and benefits through the end of 2015.” Roche also told the employees it would pay out this year the bonuses they earned in 2014.
For those wishing to continue with Genentech, Hurley said, the company is providing opportunities to apply for suitable positions: “The long-term plan is for home office InterMune employees to move to Genentech’s South San Francisco offices due to the close proximity of InterMune to Genentech.”
Roche has cited the benefit of adding InterMune’s idiopathic pulmonary fibrosis (IPF) treatment Esbriet (pirfenidone), which won FDA approval last year and European approval in 2011, to its respiratory portfolio. “Given the expertise and experience of InterMune employees in IPF, we are working to integrate InterMune positions into Roche (outside of the U.S.) and Genentech (within the U.S.) whenever possible,” Hurley added.
MODERNA: About 100 Hires this Year
Moderna Therapeutics has begun to deliver on its promise, announced earlier this month, to nearly double its workforce “in the coming months.”
The developer of treatments based on its modified messenger-RNA (mRNA) technology disclosed plans January 5 to expand its workforce of 145 employees with “more than 100 industry leaders, drug development experts, and scientists.”
“We anticipate hiring about 100 employees in 2015,” Moderna Therapeutics CFO Lorence Kim, M.D., told GEN. “We are hiring across the company in a number of different areas—science, engineering, drug development.”
The hiring effort, Dr. Kim said, will include identifying and recruiting industry experts to lead new venture companies focused on specialty treatment areas. Moderna has already launched two such venture companies—Onkaido, which is centered on oncology drug development; and Valera, which specializes in infectious diseases.
The venture companies will be Moderna’s vehicles for achieving its ambitious goal of advancing 100 new drugs to clinical trials over the next decade.
“Recruiting top scientists and drug development experts is key to meeting our goals of moving multiple treatments and vaccines to the clinic across multiple modalities and therapeutic areas as quickly as possible,” Dr. Kim said.
Those new Moderna staffers can be accommodated in the company’s two existing locations in Cambridge, MA, totaling 100,000 square feet. One is in the city’s Kendall Square section, which has emerged as a mecca for biopharma employers, while the other is at 320 Bent Street, a site the company expanded into last June 2014.
“We will think strategically about additional space needs as we consider our growth in 2015 and beyond,” Dr. Kim said.