Shire said today it will relocate more than 500 jobs and its U.S. headquarters from Chesterbrook, PA (Wayne, PA address), to Lexington, MA, as part of its One Shire global restructuring program, through which the biotech giant will concentrate operations in two locations worldwide.
Shire said the move will streamline and simplify its operations, which the company expects will save it $25 million a year starting in 2016. The relocation will also strengthen collaboration and cross-development by the commercial and R&D staffs, the company added.
The company said it plans to move employees in several phases beginning in the first quarter of 2015, with the relocation set to be completed by the first quarter of 2016. All “directly-impacted” employees who do not make the move to Massachusetts will be offered severance, outplacement service and other employee assistance.
In a statement, Shire CEO Flemming Ornskov, M.D., acknowledged the company also seeks to benefit from the critical mass of Massachusetts’ biopharma cluster.
“Shire has a great opportunity to combine our Chesterbrook and Lexington talent with the leading biotech resources in the Massachusetts area, and we consider ready access to these resources an important element in the future growth of our company,” Dr. Ornskov stated.
Dr. Ornskov was more explicit in an interview with The Boston Globe: “We think that being in the cluster of the Greater Boston area will help us. What has happened over the past decade is this has become the Mecca for life sciences in the U.S.”
The expansion comes a month after a planned roughly £32 billion ($50 billion) acquisition of Shire by AbbVie fell through, after the U.S. government signaled its intent to crack down on tax-slicing “inversion” mergers.
In an interview last month with the Globe, Dr. Ornskov said he expected Shire’s Massachusetts workforce to grow from 1,350 people over the coming year with the company, without disclosing the planned relocation.
Shire has maintained operations in Lexington for about a decade. That workforce has doubled from 675 in 2008, the year Shire announced a $394 million expansion for its Human Genetic Therapies business at the 96-acre Lexington campus that the company purchased in 2010 for $165 million. In 2012, Shire opened a $$200 million, 200,000 square foot manufacturing plant in Lexington that increased its production capacity for Vpriv eight-fold, to 8,000 L.
Shire disclosed its Massachusetts move in an announcement that also included the hiring of an interim CFO, to be based in Lexington. Jeff Poulton, an 11-year Shire veteran and the company’s current head of investor relations, will take on the additional position as of January 1, 2015. That appointment will dovetail with the tenure of the current interim CFO James Bowling, who “will be leaving Shire” on February 28, 2015, the company said.