|Flemming Ornskov, CEO of Shire|
You can add Shire ($SHPG) to the list of biopharma companies restructuring R&D.
The company is confirming reports that it plans to significantly cut back on its sizeable research operations in Basingstoke, U.K.--another setback for the country's research industry with Novartis axing more than 500 staffers and consultants in Horsham following major blows from AstraZeneca ($AZN) and Pfizer ($PFE). More layoffs are being prepped in Switzerland, where the company is relocating offices from Eysins to Zug. And it's refocusing its pipeline efforts, concentrating more on rare diseases--a popular field in R&D--as it drops an unspecified number of other research programs.
In a release out today Shire noted that it "announced recently that its product pipeline has been prioritized to focus on programs that have the best chance of clinical and commercial success, to enable Shire to fulfill its strategy. This has resulted in a decision to focus the current early stage clinical investment primarily on rare diseases. To this end, the company is proposing to discontinue a number of program outside of rare diseases. The cessation of these programs, which have been carried out in Basingstoke, will result in a significant decrease in the amount of R&D conducted in Basingstoke. A small number of functional roles will also potentially be impacted."
A company spokesperson tells FierceBiotech that the move is targeting up to 180 jobs in Basingstoke, most in R&D, adding that the company's UK operations employ some 520 employees. He declined to elaborate on any other changes being made at the company.
While Shire is much smaller than the Big Pharma companies which have been downsizing or pulling out of the U.K. recently, this latest bite will hurt the U.K.'s suffering R&D industry while possibly boosting the U.S. side of the business. The Financial Times offers that Shire is refocusing its operations in Lexington, MA, where its Shire HGT subsidiary concentrates on rare diseases. The Boston/Cambridge hub has been booming in recent years as restructurings boosted R&D employment in the region.
New CEO Flemming Ornskov has clearly set out to reorganize the company into a simpler operational structure. Over the last decade the company successfully diversified by adding subsidiaries that operated independently of each other. Now those walls are coming down, and a large number of jobs are going in the process.
Back in the spring Ornskov announced plans to centralize R&D rather than break it up among the subsidiaries. His new "pipeline" group combined R&D and business development, with preclinical research focused on rare diseases--a big growth area for the company--while business development concentrated on late-stage drug programs and in-market products with an eye to building sales in Asian and Latin-American markets.
Ornskov has also been adding new ophthalmology assets in a series of buyouts.