Issue Date: July 23, 2012
Former Pfizer Scientists Try Entrepreneurship After Layoffs
Torren Peakman’s 13 years at Pfizer’s flagship European R&D campus in Sandwich, England, came to an end when he was laid off in the second half of 2011. “It was hard. There’s nothing else in the area,” says Peakman, an analytical chemist with a doctorate.
Peakman was among 2,400 full-time staff and hundreds of contractors in Sandwich who were told in February 2011 that they would lose their jobs and that the site—which boasts a foundation stone laid in 1954 by penicillin discoverer Alexander Fleming—would close. Staffers at the Kent County site, many of whom discovered important new medicines themselves, were told the cuts were part of a multi-billion-dollar cost-reduction exercise.
After weighing his options, on Dec. 1, 2011, Peakman started his own one-man company, NMR Peak, specializing in small-molecule nuclear magnetic resonance spectroscopy data analysis. Peakman is one of fewer than 100 former Pfizer Sandwich staff to have made such a jump, but he is satisfied that he has made the right move. Like his entrepreneurial colleagues, he is making the most of an unfortunate situation by hitting the market with skills honed during years with the pharmaceutical giant.
For Peakman, starting a company has enabled him to continue with science and to work locally. “I was settled in Kent. I am 52 this year, and commuting wasn’t an attractive option,” he says, telling his story over coffee in Sandwich’s Bell Hotel, a 19th-century redbrick building and the only hotel in town. Predictably, business at the Bell Hotel has dropped since Pfizer announced the layoffs.
To keep costs low, Peakman runs his fledgling business from a home office in the medieval town of Canterbury, 13 miles from Sandwich. NMR Peak already has secured contracts, including some repeat business with a South African university and with firms in Spain, Switzerland, and the U.K.
“There are a lot of companies contracting out synthetic chemistry, so there is a gap in quality control that NMR data analysis can fill,” Peakman says. He is optimistic about the business. The original plan was “to try it out until the end of 2012, but now I plan to give it a go to the end of 2013,” he says.
Former Pfizer staffers estimate that 70% of those who worked at the Sandwich campus have since departed for new positions around the world. Although some still work in the pharmaceutical sector, others have moved into academia, retired, or changed professions to work locally.
The desire to stay in the idyllic area around Sandwich has been enough to prompt some former Pfizer staffers to commute the two hours each way by train to new jobs in London. Pharma R&D jobs in the U.K. are not easy to come by, however. Corporate downsizings in the country in recent years include a 2010 program at AstraZeneca’s Charnwood labs to cut 1,200 staff, a significant but undisclosed reduction in R&D staff at GlaxoSmithKline since 2010, and a program introduced by Novartis in 2011 to cut 550 researchers.
The situation at Pfizer’s Sandwich site is not as dire as it looked in February 2011. That June, the company decided to retain 650 staff in pharmaceutical sciences research and other science and business functions to provide a core of activity at the site. Pfizer also relocated a further 250 staff to other locations in the U.K., reducing the total number of full-time staffers laid off to 1,500.
Pfizer has renamed the site Discovery Park and is now leasing office and lab space to science companies, including start-ups. It continues to seek a buyer for the site.
In a boost for Discovery Park, the U.K. government in August 2011 agreed to provide tax relief to science companies that locate there. Since then, the generic drug maker Mylan has set up operations at the site and taken on an undisclosed number of former Pfizer scientists. Peakdale Molecular, a contract research organization, has set up activities in Discovery Park and hired 55 former Pfizer staffers.
In October 2011, Unilabs York Bioanalytical Solutions also began operating a lab at Discovery Park that provides bioanalytical services. It employs a team of five former Pfizer scientists and plans to “expand headcount rapidly” during the next year, says Angus Nedderman, a former Pfizer employee who now heads Unilabs’ metabolism and discovery services business.
In addition to these established companies, several start-ups created by former Pfizer staffers have located to the site. A sense of community among Discovery Park’s new tenants already has emerged, and companies help each other where they can, says Mark Bratt, an organic chemist who works there.
In October 2011, Bratt and process development chemist Oliver Tames started IntensiChem, a company offering scalable chemical flow processes. Drawing on more than 25 years of combined experience working for Pfizer, they invested severance money into the business to cover costs including lab equipment.
IntensiChem is located in Building 530 alongside several other new tenants. Bratt explains how the business is developing during a walk past a series of what are still sparsely populated offices and labs.
The new firm is targeting clients across the fine chemicals sector. The company has yet to secure its first contract, but it has a project under way to demonstrate a flow chemistry process to a potential client. “This could lead to fairly valuable contracts in the future,” Bratt says.
The company got started with the help of a business mentor from High Growth Kent, a regional government agency. The mentoring “kept us on track. We’re scientists rather than businesspeople,” Tames says. At the same time, the partners have enjoyed taking a more creative approach to process development than they could while at Pfizer. Despite the financial risks, the experience has been liberating, Tames adds.
For years while working at Pfizer, Bratt and Tames had discussed starting a company together, but it took getting laid off for them to make the transition to entrepreneurship. The same is true for the four ex-Pfizer partners at A4P, a provider of bioanalysis and logistics expertise that was created in July 2011.
A4P supports clinical trials with bioanalysis and sample logistics. The partners are pharmacokinetic assay specialist Richard Hucker, biomarker and diagnostics specialist Ian T. James, biologistics specialist Scott D. Vincent. and biomarker and immunogenicity specialist Carl Watson.
A4P secured some start-up funds and an interest-free loan from local government agencies. Even with the aid, running a start-up has involved a steep learning curve. “As scientists, the biggest challenges are learning how to sell and dealing with cash flow,” Vincent says.
The company has two projects under way and is in the process of signing a contract for another. A further three or four “are coming through and are in the negotiation phase,” Hucker says. More than 50% of the firm’s business is with Pfizer, but that is expected to drop over time. Typically, projects last for about a year.
A4P expects to be well placed for growth as biotech and pharma companies seek to outsource increasingly costly regulatory compliance efforts and the complicated logistics of transporting drug samples across ever greater distances on tight timelines. Sales at the fledgling company are up 50% this year, and the partners expect to double sales by 2014. As it grows, A4P is considering adding a representative in either Japan or the U.S.
The firm is upbeat about prospects for Discovery Park and hopeful that new tenants attracted to the site by tax incentives could become potential clients. After all, one reason for setting up at Discovery Park was the potential to work with other biotech firms, Watson adds.
A4P’s partners say they have no beef with Pfizer and accept that the R&D center’s closure was the result of wider pressures across the drug industry. There has been a lot of goodwill from Pfizer, and ex-colleagues have provided much constructive advice, according to Watson. Nevertheless, the team of four is enjoying a sense of liberation that comes from working in a smaller business. “Every day there is something small that comes up, and you can say to yourself, ‘I don’t have to do it that way,’ ” Vincent says.
While A4P has settled in at Discovery Park, Sandexis, a medicinal chemistry design company, is waiting for suitable labs there to be made available. In the meantime, the company’s team of three Ph.D. chemists are client- or home-office-based, offering services from high-level project consultancy through designing and executing projects from start to finish, says Gavin Whitlock, a partner in the firm.
Whitlock is a medicinal chemist who helped deliver six Pfizer molecules to the clinic. Between them, the partners have more than 45 years with Pfizer and Merck Sharp & Dohme.
Sandexis is part of a consortium that has bid to bring a European Union-funded high-throughput screening center to Discovery Park. The screening center is a project of Brussels-based Innovative Medicines Initiative, a private partnership aiming to speed up the development of medicines. If the consortium wins the bid, the center could provide Sandexis and other firms at Discovery Park with a flow of additional projects, Whitlock notes.
Sandexis is on track to make a profit in its first year, Whitlock says. The firm’s initial success has come largely from consulting projects for midsize European drug companies. Sandexis also has done some work with Peakdale, he adds.
Cangenix, a provider of structure-based drug design services, was among the first start-ups to get up and running after the layoffs at Sandwich. The company even had a project on its first day of operation last August, says David G. Brown, one of four partners—all ex-Pfizer employees—who run the company.
Previously the director of structural biology and biophysics at Pfizer, Brown now spends 30% of his time working for Cangenix and the rest in his new role as professor of structural biology at the University of Kent. Brown’s office is in the same building as Cangenix’ 100-m2 lab within the biosciences department on the university’s Canterbury campus.
Brown says he enjoys doing science in the university and helping to run the new company. Locating the firm in the school’s biosciences department has been an advantage from the perspective of scholarly exchange as well as the use of scientific infrastructure, he adds.
Cangenix’ partners gathered more than $200,000 to start the company using severance pay they received from Pfizer. Their main start-up cost has been crystallographic and biophysical equipment needed to analyze compound-target interactions. On a tour, Brown shows off a lab brimming with specialized equipment. Cangenix also has access to high-cost equipment that the university runs.
The company is on target to generate substantial sales in its first year, and “projections look very healthy for the future,” Brown says. Cangenix has hired three part-time contractors to increase capacity. The company has benefited from sound business and legal advice from family and friends as well as mentoring from High Growth Kent, he adds.
Relative job security is an unexpected benefit of being a partner in the start-up, says Colin Robinson, a cofounder of Cangenix with a bachelor’s degree in applied biology and an M.Sc. in biochemical engineering. A 19-year veteran of the Sandwich site, Robinson recalls successive waves of job cuts starting in 2005. “Every year you were just waiting for the next round of job cuts and hoping you weren’t on the list. Running your own start-up, you have awareness of cash flow and a greater degree of control of your destiny,” he says.
As was the case with Cangenix, Flow Chemistry Solutions had its first contract in place when Andrew Mansfield launched the firm in June 2011. The project ran for 20 weeks. Mansfield is a chemist with extensive experience developing continuous processes for Pfizer. His one-man firm, which in August is set to become a company of two, advises and consults on all aspects of flow chemistry.
“As soon as I heard the site was going to close I was on the phone looking for opportunities,” Mansfield recalls. One of his early projects involved gas insertion chemistry. “This was a nice opportunity and something I had wanted to look at for years,” he says. Mansfield’s experience while at Pfizer included an assignment in 2008 working with Steven V. Ley, BP Professor of Chemistry at the University of Cambridge and a leading academic in the field of flow chemistry.
Mansfield has contracts in place with English equipment manufacturer Vapourtec and Hungary-based ThalesNano to develop flow chemistry applications and help develop new reactors.
He is currently in talks with contract research organizations about “ways in which they can access their chemistry through a continuous process to make it more cost-efficient,” he says. Mansfield also is seeking to work with companies outside of the pharma sector.
“My job is to be one step ahead of the market. But it’s a very slow process to get chemists to take on new techniques. The issue is not so much one of resources, but time it takes to evaluate new chemistry techniques,” Mansfield says.
Flow Chemistry Solutions recorded a profit in its first year. Mansfield has been working in clients’ labs but is in the process of setting up his own labs in Kent Science Park in Sittingbourne, about 30 miles from Sandwich. This will “really expand what we can offer,” he says.
Mansfield and other former Pfizer scientists involved in start-ups are learning if they have both the scientific capability and the business acumen to run their own companies. “When we were at Pfizer, we were in a protected environment. The success of the new company to date has reinforced our confidence and belief in our own scientific skills,” Cangenix’ Brown says.
Not many former Sandwich staffers have taken the leap into the unknown and created their own businesses. But according to the scientists in start-ups interviewed by C&EN, the decision to stay in the area and focus on their science of choice was the right thing to do. All are optimistic about their prospects, and all say they are happy. Time will tell whether they will make a living.
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