|Novartis CEO Joseph Jimenez|
Once Novartis put out the word that it would start "consultations" about the future of its R&D site in Horsham, U.K., there was never much doubt that the pharma giant would go ahead and close the operation, putting the futures of some 400 staffers and 170 consultants in doubt. On Wednesday Novartis ($NVS) confirmed those expectations, telling a local newspaper that it will shutter the respiratory research facility by the end of June as it follows through on a piecemeal reorganization of its global research operations.
"This is a result of a global review of our R&D locations and where best to co-locate research teams to support collaboration," Novartis told the West Sussex County Times. "It is part of the company's ongoing efforts to align resources to serve patients and customers better in a challenging healthcare marketplace." Staffers and suppliers who are losing their lifelines to the company will be given "suitable support."
The shutdown at Horsham represents the single biggest changeup for Novartis R&D in recent months, as it became apparent that the drug giant intended to reengineer its global structure, concentrating more of its efforts around three big R&D hubs: Basel, Boston and Shanghai. Like other pharma companies in the Big 10, the trend today calls for integration of R&D into the big hubs, and that can doom the existence of any outlying posts like Horsham. The same trend pushed Pfizer ($PFE) to almost eliminate operations in Sandwich while Roche ($RHHBY) shuttered Nutley in favor of its massive effort at Genentech in South San Francisco.
Novartis isn't done with its reorganization. The company spends more than $7 billion a year on pharma research alone, and CEO Joe Jimenez recently told analysts that there was more money to be trimmed out of that budget. Those research cuts are being made as the company undergoes a top-to-bottom review, which includes manufacturing, sales and administration. Layoffs are the simplest means to achieve cost cuts, and that is likely to leave more Novartis staffers sweating out the year ahead as Novartis lines up more workers for the chopping block.
- here's the story from the West Sussex County Times