Roche Cutting 1,000 US R&D Jobs

Roche Cutting 1,000 US R&D Jobs

June 28th, 2012 // 10:06 am @ jmpickett

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In the latest “streamlining” effort by a big drugmaker, Roche will close a research center in Nutley, New Jersey, and shed 1,000 jobs, which is equal to nearly five percent of its entire US workforce. The R&D activities currently headquartered in Nutley will be shifted to Basel and Schlieren in Switzerland, and Penzberg, Germany.

According to Roche execs, the layoffs reflect, somewhat counterintuitively, an exceptional performance by its R&D department. “Our R&D programmes were exceptionally successful over the last 18 months, with 24 out of 28 late-stage clinical trials delivering positive results,” CEO Severin Schwan says in a statement. “The overall number of programs in clinical development has grown substantially. The planned consolidation of our research and early development organization and the refocusing of R&D activities in Switzerland and Germany will free up resources that we can invest in these promising clinical programs while also increasing our overall efficiency.”

However, Schwan did not mention a recent setback involving a pill that was designed to raise HDL, or so-called good cholesterol. Last month, an independent Data and Safety Monitoring Board recommended stopping a Phase III study of some 15,000 patients for its dalcetrapib medication due to a lack of clinically meaningful efficacy. The move was a big blow to Roche, which previously cited the drug as one of nine forthcoming meds with potential blockbuster sales potential. The pill “was potentially one of the largest new assets they had in the late-stage pipeline,” Karl Heinz Koch, an analyst at Helvea, said at the time. “In that sense it does leave a large gap” (see this).

The departure is a turnabout from the decision four years ago to reassure New Jersey politicians that some of its operations would remain in the Garden State after purchasing Genentech. At the time, Roche moved US pharma operations from Nutley to Genentech offices in South San Francisco, although separate sales organizations remained intact. And Roche manufacturing in Nutley was closed, while support functions, such as informatics and finance, were consolidated.

“Our decision to move Roche’s commercial operations to California was a strategic business decision and not about the business climate in New Jersey. The Roche-Nutley campus remains a very important hub for the company and will focus on discovering and developing medicines for cancer, metabolic and inflammatory diseases,” George Abercrombie, who headed the Roche US pharma biz, said in a statement (back story).

Meanwhile, Jean-Jacques who heads Roche’s Pharma Research and Early Development and a member of the executive committee will leave the drugmaker at the end of the month and Mike Burgess, who is currently global head for oncology and large molecule research, will become acting head. As part of the changes, Roche also plans to open a facility on the East Coast to focus on translational clinical research to support clinical trials and early development programs, among other things. this new center is expected to employ around 240 people.

Currently, Roche employs about 20,800 people in the US, a total that includes its Genentech unit. Roche, by the way, will remain visible at Nutley if only because the drugmaker will have to undertake remediation of the property.