In a major restructuring of its global R&D operations, Roche has just announced that it is closing its sprawling center in Nutley, NJ, axing 1,000 staffers and redistributing research activities in Switzerland and Germany. Jean-Jacques Garaud, head of Roche Pharma Research and Early Development and member of the corporate executive committee, is leaving the company at the end of this month. Mike Burgess will become acting head of Roche Pharma Research and Early Development.
The pharma giant ($RHHBY) has one of the biggest R&D operations in the world, with a budget of close to $9 billion last year. In its release today, Roche says it needed to streamline the research group--shuttering the storied complex in New Jersey with an 80-year history in drug development--in order to keep R&D costs in line as the number of new programs in the pipeline multiplied.
"Our R&D programs were exceptionally successful over the last 18 months, with 24 out of 28 late-stage clinical trials delivering positive results," says Roche CEO Severin Schwan. "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." He added, "In its 80-year-old history, our Nutley site has made significant contributions to Roche's success. We will do everything we can to find socially responsible solutions for the employees affected by these changes."
Existing facilities in Basel and Schlieren in Switzerland and Penzberg, Germany will pick up the dislocated programs, focusing on oncology, virology, metabolism and neuroscience. And despite laying off 1,000 workers, Roche says its other sites can handle the added load with only 80 additional staffers.
Roche says that it will wind down the work at Nutley by the end of 2013. And while it will no longer undertake lab research on the East Coast, it plans to establish a new translational research center with some 240 workers, most drawn from Nutley. Roche plans to have the new center up and running in January.
Roche is the latest of several Big Pharma companies to make dramatic changes in their R&D empires. Merck Serono is shuttering the old Serono headquarters in Lake Geneva while Pfizer has reengineered operations in the UK and Connecticut. The underlying theme here--aside from the obvious and quick cost savings --is that the old bricks-and-mortar approach to building R&D is being replace by a new research ecosystem, where more work is outsourced and investigators labor in a more open R&D environment. Big facilities are out, ideas and efficiency are in as R&D continues a migration into global hubs. And that equation is playing havoc with job security.
- here's the release