Consolidation among large drug companies has created new opportunities for chemical companies with East Coast-based research labs. Big chemical firms are moving out of aging R&D campuses into newer, recently abandoned pharmaceutical research locations.
Dow Chemical is halfway through a move into an R&D facility in Collegeville, Pa., no longer used by Pfizer. Earlier this year, Ashland’s specialty ingredients business completed moving R&D staff into Bridgewater, N.J., labs abandoned by Sanofi in 2012. And Evonik Industries is rehabilitating a former drug therapy commercialization center in Richmond, Va., to house a new business and innovation center.
Dow decided to move its Spring House, Pa., research operations to nearby Collegeville after it found an 800,000-sq-ft pharmaceutical research facility, all under one roof, built in the early 1990s. Researchers are leaving 22 buildings totaling 620,000 sq ft and dating back to 1963.
The Collegeville labs will eventually house about 800 Dow employees, most of whom work for the firm’s advanced materials business and come out of the Spring House site. So far about 400 have made the move. The rest should be on-site by the beginning of 2015.
“We had a choice,” says Nilesh Shah, Collegeville site leader and a senior Dow R&D director. “We could have expanded in Spring House or moved to a new location.” Faced with the high cost of maintaining and upgrading the older site, the company decided to move to a newer, more economical world-class facility, adds A. N. Sreeram, Dow’s corporate vice president of R&D.
Important to Sreeram, Shah, and other Dow leaders was finding a site close by so the firm would not lose researchers in the transition. Fortunately, Sreeram notes, the Pfizer location, just 18 miles northeast of Spring House, was available. Pfizer, which still owns the site, phased out research on the 360-acre campus not long after its $68 billion acquisition of Wyeth in 2009. Pfizer still maintains administrative offices there.
“So far we haven’t lost any employees because of the relocation,” Sreeram says. In addition, Dow has room to expand research and hire new employees. The firm has an option to take over three unused office wings should it want to expand further.
An advantage of occupying the former Pfizer facility was that air-handling, gas, water, and backup power systems for a research facility were already in place, according to David Bem, R&D vice president for advanced materials at Dow. “Collegeville was up to or easy to bring up to our standards,” he says.
Spacious common areas, collaboration areas, a large and airy cafeteria, and skylit atriums “encourage people who just had a nodding acquaintance of each other before to collaborate now,” Bem adds.
Ashland’s move to Bridgewater from facilities in Wayne, N.J., dating to the 1980s came about because its lease was ending. The firm had inherited the Wayne site when it acquired International Specialty Products (ISP) in 2011.
The 200,000-sq-ft Bridgewater facility is within a former Sanofi pharmaceutical research site about 35 miles from Wayne. The new location includes R&D labs and offices for Ashland’s specialty ingredients unit. It houses nearly 300 people. As is the case for Dow, all of Ashland’s new research labs are under one roof.
Until it decamped, Sanofi operated a 1.2 million-sq-ft R&D campus at the Bridgewater site. The shutdown in 2012 moved many Sanofi researchers to a new Boston hub as part of a North American R&D reorganization.
Ashland evaluated several sites before it chose the Bridgewater location, says James Mish, the firm’s consumer specialties group leader. Important considerations were proximity to the former ISP site in northern New Jersey and laboratories large enough to accommodate current staff and future needs. The location is also close to many customers in the personal care and pharmaceutical industries.
Ashland benefited by taking over a complex originally designed for pharmaceutical research, Mish says. Much of the infrastructure the firm needed, including air-handling equipment, water, backup generation systems, and utilities, were in place.
For its new business and innovation center in Richmond, Evonik is reconstructing a 93,000-sq-ft office building on an 18-acre site it bought from cigarette maker Philip Morris. The office once housed Chrysalis Technologies, a Philip Morris division that commercialized company advances with potential beyond the tobacco industry. One of those technologies was a nicotine aerosol device that the firm promoted as a drug delivery system.
The $15 million gut rehabilitation of the former office building will be complete in the first quarter of 2015, according to Paul Washlock, an Evonik vice president. When it reopens, the building will house about 150 people who now work at two cramped sites in Hopewell, Va., about 20 miles away. The plan is to expand staffing by about 50 at the Richmond site in the next few years, he says.
“We looked at sites in Indiana and New Jersey before we selected the Richmond site,” Washlock notes. Tax incentives and the easy commute for researchers from Hopewell figured into the decision to stay local, he says.
Although long-term trends don’t seem to favor big pharma research, it’s a loss that chemical firms have realized they can turn to their advantage. “We got lucky,” Dow’s Shah says. “The labs in Collegeville were empty, and we could move in almost as quickly as we wanted.”