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Pharma Firms Make Biotech Staff Cuts

Employment: After buying small biotech businesses, big pharma decides to close operations

by Ann M. Thayer
March 12, 2015 | A version of this story appeared in Volume 93, Issue 11

Credit: Kris Tripplaar/Sipa USA/Newscom
Amgen will close this Onyx site in South San Francisco.
Photo of a logo sign outside the headquarters of Onyx Pharmaceuticals, Inc., in South San Francisco, California on December 7, 2014.
Credit: Kris Tripplaar/Sipa USA/Newscom
Amgen will close this Onyx site in South San Francisco.

Amid a slew of ongoing pharma company restructurings, moves made by a few firms suggest that what they really want are the products, not all the employees, at the small companies they recently acquired.

Only two months after spending $9.5 billion to buy Cubist Pharmaceuticals, Merck & Co. will close Cubist’s drug discovery unit in Lexington, Mass., and eliminate about 120 jobs beginning in May. With the acquisition, Merck got a handful of antibiotic products, including Cubicin, which had 2014 sales of just over $1 billion, and the more recently approved Zerbaxa.

Merck will transfer promising Cubist discovery projects to other Merck sites and continue to develop later-stage Cubist candidates. Merck is said to be evaluating its overall operations in the Boston area.

Thinking about antibiotics along similar lines, AstraZeneca decided last month to spin off its Boston-area anti-infectives R&D unit, while keeping marketed and late-stage products. The move leaves about 95 employees with an uncertain future.

On the other side of the continent, California-based Amgen is consolidating its oncology operations after an acquisition. By year-end, it will reduce the workforce at Onyx Pharmaceuticals, which it acquired for $10 billion in 2013, by about 300 people in home and remote offices. Onyx’s cancer drug Kyprolis, launched in 2012, is among Amgen’s fastest-growing products.

Amgen was already planning to cut as much as 20% of its workforce this year and close two R&D facilities in Washington and two production sites in Colorado. Now it will shut the Onyx site in South San Francisco as well. Commercial and development operations will be consolidated at Amgen’s Thousand Oaks headquarters, and some Onyx R&D jobs will move to Amgen’s South San Francisco facility, which the company intends to expand.

Meanwhile, Ireland’s Shire is looking to save $25 million per year by concentrating U.S. operations in Lexington, Mass. It recently filed paperwork with Pennsylvania authorities indicating that it would eliminate 600 jobs in Chesterbrook, Pa., beginning in April. It is not certain how many jobs will be transferred to other Shire sites. Shire has also just acquired the U.S.-based rare disease firms NPS Pharmaceuticals and Meritage Pharma.



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