Daiichi axes 170-person Indian R&D site

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The closure follows the shuttering of Daiichi sites in Europe

Daiichi Sankyo is to shutter its 170-person Indian R&D site. The Japanese drugmaker brought the site into its network in 2010 following its $4.6 billion acquisition of Ranbaxy Laboratories, but has now decided it can boost R&D productivity by axing the operation.

Today, a team of 170 people work at the facility on the discovery and preclinical development of small molecules against infectious and autoimmune diseases. Under Ranbaxy the unit chalked up some successes, gaining a reputation for its synthetic chemical research capabilities and becoming the heart of an alliance with GlaxoSmithKline. But Daiichi management has decided to close the unit and transfer pipeline programs in development at the site to its main R&D division.

The decision is part of a broader effort at Daiichi to cut R&D costs and focus remaining resources on areas other than those worked on at the site in Gurgaon, India. That facility joins R&D sites in the United Kingdom and Germany on the list of those axed by Daiichi in the past two years.

In parallel to the internal cuts, Daiichi has penned a string of oncology deals designed to give it a pipeline of candidates that can increase its success rate in the clinic. The most recent and high profile of these agreements is the deal with Kite Pharma, which gave Daiichi the rights to CAR-T drug KTE-C19 in Japan. KTE-C19 is now spearheading an immuno-oncology pipeline that Daiichi is hoping to flesh out through collaborations with companies including AgonOx and Zymeworks.

The shift toward oncology and increased reliance on external collaborations rendered the Indian site a poor fit for the new look Daiichi. Gurgaon made more sense as a Daiichi outpost in 2010, when the Japanese drugmaker was in the middle of an ultimately doomed attempt to make India a cornerstone of its business. That strategy ended in 2014 when Daiichi cut its losses on its buyout of Ranbaxy.