Merck & Co. to Cut Research Jobs at Three East-Coast Sites
July 12 2016 - 3:20PM
Dow Jones News
Merck & Co. said it plans to lay off
research-and-development workers at three East Coast sites in a
shake-up of its early-stage drug-hunting efforts that also includes
a new focus on the health effects of micro-organisms that populate
the human body.
A Merck spokeswoman said the job cuts, and some employee
transfers, would affect less than 10% of "discovery, preclinical
and early development" employees in Kenilworth, N.J., Rahway, N.J.,
and North Wales, Pa. The company's headquarters are in
Kenilworth.
The move marks the latest round of layoffs and reorganization
for Merck's research unit, which was once known for cutting-edge
drug development but which hit a fallow period late last
decade.
Other large drugmakers including Pfizer Inc. and GlaxoSmithKline
PLC also have cut R&D spending or reorganized research units in
recent years to become more productive relative to their
spending.
The Merck spokeswoman said the company is making the changes to
allow it to have "earlier access to emerging external science and
technology to augment our leading discovery and development
capabilities."
At the same time, Merck plans to start new laboratories in
Cambridge, Mass.—near Boston—and the San Francisco Bay Area, as
part of a trend among large drug makers to try to tap into hot
clusters of biotechnology start-up activity and academic
research.
In Cambridge, Merck is creating a new "exploratory science"
group that will focus on emerging research, including the role of
the so-called microbiome in human health. The microbiome is the set
of bacteria and other micro-organisms that reside in the human
body. Emerging research suggests that finding ways to alter the
microbiome can treat certain conditions, such as inflammatory bowel
disease.
Merck's head of infectious-disease discovery research, Daria
Hazuda, will lead the Cambridge exploratory science site, the
spokeswoman said. The new Cambridge labs are scheduled to open
later this year.
Merck also plans to set up a research site in South San
Francisco in early 2017 that initially will focus on
cardiovascular, metabolic and cancer research.
The new changes are the latest at Merck since Roger Perlmutter
took over as R&D chief in 2013 with a mandate to improve the
once-storied division. That year, Merck embarked on a plan to
reduce its total work force by about 20%, including cuts among
R&D scientists, as the company narrowed its focus to certain
treatment areas, such as cancer immunotherapy.
Dr. Perlmutter also boosted Merck's scouting of external drug
R&D projects that it could acquire or license.
Merck has reduced its annual R&D spending to $6.7 billion
last year from $8.5 billion in 2011.
The pharmaceutical R&D blog "In the Pipeline" reported some
of the Merck changes on Tuesday.
The Merck share price rose 0.6% to $59.71 in recent trading on
Tuesday.
(END) Dow Jones Newswires
July 12, 2016 15:05 ET (19:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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