Novartis to chop 371 jobs, shutter research center in global R&D shakeup

Novartis CEO Joe Jimenez

Novartis ($NVS) is bringing the ax down on close to 400 R&D jobs at its respiratory R&D center in West Sussex in the U.K., signaling that the restructuring is part of a broader global realignment.

The pharma giant hammered the British community two years ago when it eliminated a major manufacturing operation in Horsham. But the Novartis Institutes for BioMedical Research had committed to keeping its research work going and last fall discussed a major upgrade for the site. Today, though, it confirmed that it will shutter the complex, where investigators concentrated on respiratory programs.

"Novartis UK is today announcing that it will initiate consultation on proposals to close its Horsham site in West Sussex," Novartis said in a statement to FierceBiotech. "These proposals will impact up to 371 roles, but will be subject to an employee consultation process and final UK board approval."

Novartis added that it is shelving its marketing work on diabetes and COPD, possibly eliminating 72 field positions in its sales group.

The move signals a wider "realignment" of R&D worldwide, the company said in its statement.

There's no immediate word from Novartis on what it intends to do with its huge global R&D effort, which consumes more than $9 billion a year. Novartis has long held the title for the largest R&D budget in the industry, but has also built one of the largest drug pipelines in the industry.

Most of the Big Pharmas have triggered some sort of R&D reorganization over the past few years, though Novartis was always one of the few exceptions to the rule. Instead, the company under CEO Joe Jimenez has focused on regular rounds of restructurings in other parts of the company to keep a lid on costs.

Despite its talks of consultations, though, there's little that U.K. officials or workers can do once Novartis decides to close a site. Pfizer ($PFE) shuttered most of its R&D work in Sandwich, despite the hue and cry that the reorganization provoked. And AstraZeneca ($AZN) is in the process of shifting a big part of its research efforts to Cambridge, while downsizing its overall operations. The only country that has had much success in forcing a Big Pharma CEO to back off a restructuring is France, where Sanofi ($SNY) found out just how powerful a leftist government allied with strong workers unions can be.

What remains to be seen is just what Novartis has in mind when it discusses a global reorganization of research work. The company routinely shrugs off questions about its plans, preferring to keep its own counsel. 

"This potential restructure of operations at the Horsham site is the result of a global review of research operations and realignment of our other global R&D sites," Novartis said in its statement. "The proposals are part of the company's ongoing efforts to align resources to better serve patients and customers in a challenging healthcare marketplace. … Our pipeline and future potential growth are strong. However, we face challenges in today's industry."

Rumors of the latest restructuring in R&D first surfaced on Derek Lowe's InThePipeline blog, which often contains the first smoke signals of the fire to come. 

- here's the full Novartis statement provided to FierceBiotech

Special Report: Biopharma's Top R&D Spenders: 2012 - Novartis