Bristol-Myers Squibb has announced a major reworking of its R&D and manufacturing sites across the U.S. as it plans to shut down a host of centers while integrating others, forming part of its new research strategy announced earlier this year.
First up, to the closures: In a “phased multi-year” deal, the company will shut down its Hopewell, New Jersey site in a decade’s time. This 433-acre campus currently has one million square feet of labs, office space, and computing facilities, “with opportunities to expand in the future,” according to its website.
Bristol-Myers Squibb acquired the site for use as a research, data, and administrative center nearly 20 years’ ago.
It will also not be renewing its lease at the Lake Union Steam Plant site in Seattle, Washington, in 2019.
The site is run by BMS’ ZymoGenetics, which it bought in 2010 for nearly $900 million where, since 1993, it has been predominately focused on the discovery and early manufacture of therapeutic proteins. It is not clear what will happen to the staffers there.
BMS also confirmed previously announced plans that it will indeed close its Wallingford, Connecticut, site by the end of 2018; it will also no longer build a Connecticut Development site, as it had once planned.
Where is everyone going? “The company expects many of the roles from Wallingford, Hopewell and Seattle will transition to other U.S. locations,” it said in a brief update that was short on details and with no numbers on staff losses.
In a statement to FierceBiotech, BMS did not give specific numbers of staff reductions, but said: “As part of the evolution of our operating model announced in October, we are in the process of evaluating the roles and work within all functions based on changes to the needs of our business, our geographic presence and broader decisions in support of our company transformation.
“Specific to the announcements today, we expect many of the roles from Connecticut, Hopewell and Seattle will transition to other U.S. locations, with specific details evolving over the next several years.”
But where there are cuts, there are also other investments and changes. Bristol-Myers said will be making investments in the construction of a new R&D building at its Lawrenceville, New Jersey, campus (as it closes down Hopewell).
This will “co-locate lab-based discovery and translational medicine activities, construction at its New Brunswick, New Jersey facility to support biologics development, and construction to continue expansion of its biologics campus in Devens, Massachusetts,” it said in a statement.
This forms part of its preannounced changes, including the expansion of its Redwood City research campus in the Bay Area, as well as its recently opened Princeton Pike facility in New Jersey.
“These important changes to our U.S. geographic footprint will ensure we have the structural, operational and financial flexibility to deliver as effectively as possible on our mission for patients,” said Giovanni Caforio, CEO at Bristol-Myers Squibb.
“Today’s announcement underscores our commitment to make the right investments to continue to deliver on the promise of our pipeline and to bring transformational medicines to patients, today and in the future.”
Bristol-Myers has been on an R&D spending spree of late, signing a deal potentially worth $1.74 billion in October last year that saw it grab worldwide rights to an early-stage anti-immunosuppression drug from Five Prime that can be combined with its pioneering checkpoint inhibitor Opdivo (nivolumab).
In July, it also inked a buyout deal for Sweden’s Cormorant Pharmaceuticals in an acquisition worth just north of $500 million, just four months after BMS paid $600 million to buyout the biotech startup Padlock Therapeutics and its autoimmune R&D platform.
This comes after last February’s potential $1.25 billion deal that saw it bag IDO immunotherapy in its buyout of fledgling Flexus.
But it has seen a major setback recently when its big I/O med Opdivo failed in a key lung cancer trial, that could have boosted its chances of beating out its rival in the first-line lung cancer market.
When the data were presented back in August, Bristol watched its share price plunge 20% while competitor Merck soared 10% after BMS said Opdivo had failed to meet goals for use as a first-line treatment for lung cancer, likely pegging back its sales ops for its biggest new hope.
Given that it must now rely on less sales from Opdivo in the future, and coming after a major spending spree, BMS might just be breathing in to fit into those tighter pants.
The market reacted reasonably in favor of the changes, with BMS up 0.7% this morning on the news.