Biopharma's new normal: Constant makeovers leave R&D jobs at permanent risk

(UPDATE: The day I posted this piece, Amgen was telling its staffers that it will shutter its Onyx campus and lay off 300 employees while integrating the rest of the workers in California sites. Add it to the roster of purges below.)

Every year when I'm assessing the top trends in the industry, R&D restructuring can be relied on to make the top 5. Four years ago, Pfizer ($PFE) sent shockwaves through the industry when it announced plans to close its R&D complex in Sandwich--later it decided to keep some operations--while scaling back dramatically in Connecticut. Roche ($RHHBY) followed with its plan to close Nutley, NJ, and companies like Sanofi ($SNY) and GlaxoSmithKline ($GSK) set out to find some new approach to R&D that could justify their multibillion-dollar annual investments. Merck ($MRK) was one of the last to finally give in to the trend.

That period of intense Big Pharma turmoil, though, has failed to create a new normal that can offer investigators greater confidence that they'll be able to keep their jobs. And the disruption is continuing with a new wave of restructuring every bit as traumatic as the first tsunami of makeovers.

In just the last few months we've seen a troubled GlaxoSmithKline, which once touted small, biotech-like development units as the answer to its problems, rip into its R&D operations in North Carolina while prepping for a major asset swap with Novartis ($NVS) that will affect its entire oncology group. Pfizer has ordered unspecified layoffs in Cambridge, MA, and Collegeville, PA, just months after opening its shiny new R&D center in Massachusetts. Shire ($SHPG) recently warned about a "mass layoff" in Pennsylvania as it waits to see how many of up to 600 jobs--many in R&D--will be relocated to its facilities in Massachusetts or face the ax. Sanofi decided to cut back in cancer R&D, laying off about 100 in the Boston hub. AstraZeneca is bowing out of early-stage anti-infectives R&D, cutting a division in Waltham, MA that once employed 175 down to a biotech that will probably be spun out with about 25 staffers. Merck KGaA has been making cuts in Billerica, MA, even as it prefers to discuss growth in oncology. And the pharma giant Merck demonstrated in recent days that the big M&A wave comes with major cuts in R&D--a prospect that drives Valeant's entire business model.

Today, biotech takeovers are hot. And the industry is paying for it with more R&D upheaval. Just ask anyone working for Pharmacyclics about their sense of job security in the wake of the AbbVie buyout. AbbVie's $21 billion premium price all but guarantees big cuts--fast.

And that's all new. Go back further into 2014 and you'll see major rounds of layoffs at Amgen ($AMGN), Novartis and more. (Most of these more recent stories, by the way, were either broken or significantly advanced by FierceBiotech. Stay tuned for more.)

To be sure, a lot of this recent turnover has to do with the industry's unending need to reinvent itself. When one field--let's take immuno-oncology--becomes hot, then everyone rushes in. Priorities change. R&D budgets change. New people are hired. Old jobs are eliminated. Shire gets a new chief who wants to take a model that purposefully scattered operations around the world and centralize it in one location. Amgen also hears the call of concentrating resources in the big hubs.

But it's not all about the need for staying current. Companies like Pfizer and GlaxoSmithKline are changing up organizations because they have failed to generate much excitement with their pipelines and research performance. When a big outfit like GSK gets a big approval for Breo, and gets little in return, something's going to change.   

Roche invited me down to Nutley a few years ago to talk to the research survivors about to make the transfer into Manhattan. Walking through the deserted campus, I thought it would make a great set for a post-Apocalypse movie. The empty buildings, abandoned parking lots and lonely sidewalks make for a dramatic setting. It's too bad they're still shooting the same movie in biopharma. They're just using different locations. -- John Carroll, editor-in-chief (email | Twitter)

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