Roche To Close Nutley, N.J. Site

Roche is closing its Nutley, N.J., research site in a move expected to cost 1,000 jobs. Oncology and virology R&D activities will be shifted to facilities in Switzerland and Germany, where about 80 positions will be added, but Roche is shutting down its inflammation discovery unit.

The Swiss drug giant claims the cuts will enable it to keep R&D spending flat despite a steady rise in the number of projects in clinical studies. Roche CEO Severin Schwan noted that 24 out of its 28 late-stage clinical trials have been successful over the past 18 months.

Jean-Jacques Garaud, head of pharma research and early development, will leave the company at the end of the month, and Mike Burgess, currently head of oncology research and large molecule research, will take over his duties on an interim basis.

When the Nutley site closes, Roche will no longer have laboratories on the East Coast. The company will instead create a Pharmaceuticals Translational Clinical Research Center, intended to support its interactions with regulatory authorities and academic and biotech partners. Roche expects to transfer roughly 240 jobs from Nutley to the center, which it hopes to open in 2013 at a yet-to-be-determined site.

Drugs such as Valium and other benzodiazepines were invented at Nutley, which has been the centerpiece of Roche’s U.S. operations for 80 years. But the site’s role shifted after the company’s 2009 acquisition of Genentech. Commercial operations were transferred to Genentech’s South San Francisco site that year, and in 2010 some research activities—notably, RNAi research—were ended at Nutley.

“Nutley’s legacy and footprint as a much larger former regional headquarters and manufacturing site left us with an expensive and oversized infrastructure,” Tom Lyon, Nutley site head, said in a statement today. “While we have made notable progress to cut costs by more than 50% in the past two and a half years, it was not enough.”