UPDATED: Merck to shutter Cubist unit in May, axing most of the 128 R&D staffers

Merck has issued its WARN letter on upcoming cuts at Cubist's Massachusetts operations, outlining plans to shutter its discovery and nondevelopment unit in Lexington, MA, and terminate 128 jobs.

The layoffs are slated to start May 5 and extend for two weeks as the pharma giant closes the site, eliminating all the jobs involved, the company explained to state and local officials.

Merck's Terri Lee

"No bumping rights exist (meaning they can't take a junior staffer's job and force them out of the company), and the employees working in the operating unit are not represented by any union or covered by any collective bargaining agreement," Merck ($MRK) noted in its letter to the state, which was emailed to FierceBiotech Friday night by state officials. Merck's Terri Lee, VP for government affairs, penned the letter.

Asked about the possibilities of more layoffs ahead, a spokesperson for Merck noted that the company is still reviewing all its regional operations, planning to update Merck's plans on finalizing the integration of Merck's facilities and staff in the Boston area by the end of the first half of this year. Lainie Keller, Merck's director of global communications, also emphasized that while Merck is closing the R&D unit and laying off workers, it still has facilities and staff in Lexington. She adds that a few staffers will be reassigned to new jobs, leaving the total number of workers to be axed at "about 120."

"It's important to note that while discovery and non-clinical operations at Lexington will be discontinued, this doesn't mean the entire Lexington site will be shut down," says Keller in an email. "At this time, we are continuing to evaluate all aspects of the combined organization, and this includes our real estate footprint in the Boston area. We hope to provide further information on our plans by the end of the second quarter of 2015."

Cubist has about 1,000 employees in total, including about 600 in Massachusetts: 450 at its R&D center in Lexington, MA, as well as its Boston-based business development center. The company told workers a few days ago that it's planning to ax about 120 staffers in the R&D group in the wake of its $9.5 billion buyout, which was first reported by the Boston Business Journal.

In recent weeks there has been a major round of retrenching among some prominent biopharma companies. Shire ($SHPG) just issued notice about a planned "mass layoff" in Pennsylvania as it consolidates R&D in Massachusetts, where Merck is cutting. Pfizer ($PFE), meanwhile, has cut an unspecified number in its Cambridge, MA, and Collegeville, PA, research facilities. And GlaxoSmithKline ($GSK) is making deep cuts in North Carolina and the Philadelphia area. Merck KGaA, meanwhile, has been cutting an unspecified number of research staffers in Massachusetts as it trims back internal operations focused on multiple sclerosis. And AstraZeneca ($AZN) is spinning out its anti-infectives unit in Waltham into an independent biotech, ripping into an organization that employed 175 workers a little more than a year ago. 

Merck's bet on Cubist followed a rebound in Big Pharma interest in antibiotics after years of inattention to antibiotic R&D spurred the current increase in demand--and market opportunity--for anti-infectives.

The big get was Cubist's anchor product, the blockbuster Cubicin, which pulls in roughly $1 billion a year. In the deal, Merck also inherited the recently launched Zerbaxa, a combination treatment designed to fight complicated urinary tract and intra-abdominal infections caused by Gram-negative bacteria. And last year Cubist won approval for Sivextro, a superbug treatment it picked up in its $707 million acquisition of Trius Therapeutics. Thanks to Cubist, Merck's antibiotics pipeline now includes treatments for hospital-acquired bacterial pneumonia, Clostridium difficile infection and opioid-induced constipation.

Damian Garde contributed to this report.