As the center of gravity shifts in the life sciences, Merck is reorganizing its R&D teams by closing one facility, eliminating about 360 jobs from three sites, and transferring other employees to a pair of new facilities that are slated to open on opposite sides of the country.
A spokeswoman for the drug maker, which is headquartered in New Jersey, confirmed that the planned changes affect drug discovery, preclinical, and early development work. As a result, the company is closing a facility in North Wales, Pa., which screens compounds for potential drug development.
At the same time, Merck is cutting jobs in Kenilworth and Rahway, N.J. The company is not providing specific breakdowns, but the spokeswoman said that all totaled, less than 10 percent of roughly 3,600 people in early-stage R&D work at these three locations will lose their jobs. Another way of looking at it is the jobs to be lost amount to roughly 3 percent of the 11,900 who work in R&D companywide.
The spokeswoman explained that the changes, which were first reported by the In The Pipeline blog, reflect a need to focus more resources on tapping products being developed elsewhere. And Merck also plans to conduct more R&D in the Boston and San Francisco life sciences hubs.
For instance, Merck later this year expects to open new labs at its Cambridge, Mass., location, which will focus on emerging sciences, including the role of the microbiome in disease. The company also plans to open a new research site in the San Francisco Bay area to focus on cardiometabolic disease and oncology. An interim location is planned for early next year, the spokeswoman said.
These moves come as the biopharmaceutical industry increasingly congregates in the Boston area and, to a somewhat lesser extent, in San Francisco. The shift has been under way for several years, actually, as these two cities leverage a unique mix of universities, teaching hospitals, and venture capital.
The pool of brainy talent that hatched numerous startup companies has snowballed and prompted a growing number of established drug makers to open or expand their own R&D facilities. Merck, for instance, opened its existing Boston facility in 2004.
Merck has, actually, been cutting staff for years. In 2013, the drug maker disclosed plans to slash its 81,000 headcount 20 percent by last year. The move involved closing offices in New Jersey and discontinuing some late-stage drug development, all of which was designed to save about $2.5 billion annually.