Merck KGaA shuttering Swiss complex, dispatching R&D to Boston

Once again a big pharma company is restructuring in the wake of a dismal R&D record. And once again the Boston research hub is coming out ahead in the deal.

Today it's Merck KGaA's turn to downsize. The pharma giant is closing the swanky Swiss headquarters facility it picked up in the big Serono takeover, laying off more than 500 workers while dispersing hundreds more to Boston as well as Darmstadt and Beijing. The headquarters functions at the company are all being consolidated in Darmstadt as Merck Serono relocates a total of some 750 workers to facilities around the world. And to help take some of the sting out of the big layoffs planned in Switzerland, the company plans to invest up to $40 million in seed financing for any companies that spin out of the company during the restructuring.

Merck KGaA was once considered a leader in the race for an oral MS drug. But the poorly conceived cladribine program failed to produce the kind of data needed to convince regulators, forcing the company to scrap the program and take a hard look at who was running the research division and exactly what they were accomplishing. The pharma giant has been talking about laying off staffers for months, and now plans to start handing out pink slips in the second half of the year. Downsizing workforces in Europe is no easy matter, leaving Merck KGaA looking to the first half of 2013 to complete much of the restructuring.

The global work being done to reengineer Big Pharma's pipeline has proven a boon to Boston, where the booming R&D hub has been rewarded with jobs from companies like Pfizer ($PFE). As Bloomberg notes in its coverage, Merck Serono's Lake Geneva facility cost $1.25 billion to build, featuring a glass and steel roof that can be tilted to help cool the building. That 725,000-square-foot complex will now go on the market.

- here's the press release
- read the Bloomberg report