P&G To Drop Pharma R&D

Procter & Gamble Pharmaceuticals plans to jettison its discovery-phase R&D efforts to focus on in-licensing late-stage compounds. The decision will result in the loss of 300 scientific jobs in Mason, Ohio.

"We have made a strategic choice to externally acquire rather than internally invent new medicines," says P&G spokesman Tom Milliken. The company argues that, with pharmaceutical compounds being developed by more than 4,400 biotech companies, many of which lack experience and funding, a partnership model is now the most efficient way to bring drugs to market.

P&G will have its full licensing and acquisition structure in place by the end of June. The new group will focus on capturing drugs that are in Phase II development or later. Future development efforts will be concentrated in three therapeutic areas: muscular-skeletal drugs, women's health products, and gastrointestinal treatments.

Although it is unclear whether P&G's decision signals an industrywide trend in favor of in-licensing, it does parallel a spate of cutbacks in internal R&D operations among major drug companies. Earlier this month, Johnson & Johnson said its drug discovery unit in Raritan, N.J., would be closed. Some 280 positions were eliminated, though 100 will be added at a J&J research site in Spring House, Pa.

Applera Corp. announced in January that 180 positions will be shed at subsidiary Celera Genomics' South San Francisco chemistry facility. Applera wants to partner or sell Celera's small-molecule drug development program, which includes two drugs in clinical trials.

Meanwhile, R&D jobs are at risk at Merck as the company cuts 7,000 positions through 2010. Merck recently said it would close a basic research center in Terlings Park, in England.