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Europeans Chart New Paths for R&D

Akzo Nobel, UCB reorganize drug research units

September 6, 2004 | A version of this story appeared in Volume 82, Issue 36



In a bid to boost their pharmaceuticals business, Akzo Nobel and UCB Pharma are separately reorganizing operations.

Akzo Nobel plans to combine two operations, Diosynth and Organon, into one business unit, effective January 2005. The new unit will use the Organon name. Diosynth, however, will remain a subsegment providing third-party custom manufacturing.

To support the integration, Akzo Nobel will invest nearly $75 million in Oss, the Netherlands, to build a parenteral drug production facility. A biotechnology research facility in Cambridge, Mass., will be created as well.

"The integration and investments are an exciting next step in the strategy to 'fix pharma' and represent the new way forward," says A. T. M. (Toon) Wilderbeek, the Akzo Nobel board director responsible for health care. "This is not primarily about costs. It is much more aimed at building the business in a way that will move us forward."

According to Akzo Nobel, the combined business will leverage its know-how, technologies, people, and facilities to capitalize on market opportunities. It also allows the company to combine the separate biotechnology activities of Organon and Diosynth into one platform.

Akzo Nobel says it has selected Cambridge for its new biotechnology research facility because of its high concentration of medical research institutes, universities, and hospitals. The investment in the parenteral facility, meanwhile, confirms Akzo Nobel's commitment to its pharmaceutical activities and to the production site in Oss.

About 60 full-time jobs will be lost, roughly 50 of which will be in Oss, and the remainder in Roseland, N.J., the company says. An extended management team will be based in Roseland and in Oss.

The Akzo Nobel reorganization mirrors that of UCB Pharma, part of Brussels-based UCB Group. UCB Pharma is reorganizing its R&D operations following its recent acquisition of Celltech.

The move is designed to create research centers of excellence in the Brussels suburb of Braine-l'Alleud, and in Slough and Cambridge in England, while eliminating duplication of activities. R&D will focus on antibodies and small molecules, covering the therapeutic areas of central nervous system pharmacology, inflammation, and immunology.

As part of the reorganization, UCB will close its research facility in Boston this October, with the loss of 86 jobs. The small-molecule research carried out in Boston will be transferred to the Braine-l'Alleud and Cambridge sites. Following the consolidation, the company will have more than 1,400 people in research.

Melanie Lee, head of R&D at UCB Pharma, says that, while the quality of scientific research at the Boston site "has been exceptional, the enlarged R&D organization allows us to accommodate these activities more efficiently within our research centers of excellence. This will enable us to maximize the impact of our R&D budget by redeploying financial resources to accelerate development of our promising pipeline."



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