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Layoffs at Takeda

Unfortunately, I have another round of layoffs and cutbacks to announce. Takeda has been talking about rearranging its R&D for months now, and they’re finally gotten around to it. Their operations in the UK are getting hit particularly hard, as the company says that Shonan, Japan and Boston will be their two major R&D sites.

That’s also bad news for their site in Chicago, where I’m told that a large part of the staff is being laid off, with some being offered a move to Boston. Some there are also being offered positions as part of a new CRO arrangement (but that, of course, entails a large cut in benefits, etc.) The company’s San Diego site has also seen layoffs, going well up into management. And even thought the Boston site is going to be the company’s US flagship, I’m hearing of a number of layoffs there, too, although these (from the sound of it) are less in management and more directed at bench scientists. . .

30 comments on “Layoffs at Takeda”

  1. anonymous says:

    Been there and done that. Nothing new here in terms of bench chemist being laid off while the management is holding up study. Hell, who cares? Nothing learned here. I just asked my son, who is brilliant in Chemical Engg. to take up some MBA courses as well.

    1. steve says:

      After your son gets his MBA, tell him to start his own company. As I’ve said before, high risk but high reward. Wish I’d started out that way at his age.

    2. No_MBA_please says:

      Get an MBA? Not sure that is the right move either.

      Here’s why: When I look at the so called executives at Roche, I doubt that most of them have MBAs. Most of them have ‘technically’ pretty useless degrees (Ph.D in Pharmacology, Ph.D in Toxicology etc), which explains their extreme lack in field knowledge. But that is another story, and I was pretty embarrassed for their severe technical incompetencies, when I was there. Yet, they are the ‘leaders’. Yes, the Roche ones make for damn good clowns that way.

      Clearly, those people were there at the right place and at the right time. Those relatively old imbecile executives brought nothing to the table, but a boat-load of stomach churning politics, to keep themselves look ‘important’.

      This thread seems to indicate that those ‘golden’ days are to be over soon. The key therefore is right time, right place? I would ask my kids to go to law school or med school if they are looking to make solid money and have stable careers, at this point.

  2. Pfizer Joe says:

    Who will be next? This market keeps shrinking. Pfizer next? I hear hiring freeze – generally means reorg!

  3. takedaseverancepackageortakenothing says:

    “And even thought the Boston” typo.

  4. Anonymous2 says:

    Also being proposing to the Japanese bench scientists to be entrepreneurial, go forth and spin out their own biotechs / CROs at the Shonan Research Center, Japan! Watch out Wuxi, juggernaut of productivity on the horizon!

  5. MikeB. says:

    Scientists need to ditch the hubris and stop underestimating the importance of the business aspects of running a company, especially in biotech. Believe it or not, the vast majority of scientists don’t have any skills that are in short supply or are special. There’s a new crop graduating every year with enough expertise for companies to skate by. Why pay triple the price then for a senior scientist?

    1. anon says:

      OK let’s talk about something else.

    2. wageslave says:

      Judging by how well this model is working for other large Pharma/Biotech companies, maybe it is the management who need to ditch the hubris?

    3. anon12 says:

      Pretty sure the same claim could be made about those people charged with running the business aspects of an organization. Why not just plug in the recent b-school grads instead of paying the bloated salaries of experienced managers/executives?

    4. Dr CNS says:

      MikeB,

      Not sure where you come from, but to clarify, a senior scientist does not do the same than a junior scientist for 3 times the salary. If they do so, of course they should go. But generally, experienced drug hunters have dedicated themselves to learning from the never-ending book of drug discovery. They bring something to teams that cannot be found in the wiki. The way some organizations are getting rid of them indicates a level or arrogance and ignorance incompatible with good leadership.

      Back when people understood the value of experience in drug discovery, young scientists could be mentored and their energies channeled into productive ways. Today, without the knowledge from senior colleagues, I see a lot of “reinventing the wheel” and energy put in projects that could never work.

      “Good judgement comes from experience, and experience comes from bad judgment.”

  6. Anonymous2 says:

    Takeda has a 235 year history and about 20 years ago, decided to have a go at globalizing instead of being a strong regional company. The strange thing is that Takeda actually is profitable and can exist as a stable OTC drug supplier in Japan. The notion is the pursuit of growth and lack of blockbuster success for many years has led to disastrous decisions, which in retrospect, could have been anticipated.

    1. SedatedFMS says:

      So what you’re saying is that “management need to ditch the hubris and stop underestimating the importance of the science in the running of a drug company. Believe it or not, the vast majority of management don’t have any skills that are in short supply or are special. There’s a new crop graduating every year with enough expertise for companies to skate by. Why pay triple the price then for a senior manager?”

  7. Isidore says:

    The more experienced scientists may not like it, but the fact is that companies need a balanced mix of younger, less experienced but more technologically current (and lower paid) scientists along with the seasoned, experienced but more technologically dated (and higher paid) scientists. Unfortunately most companies that have been around for a while and which have not been growing very fast have not been hiring many of the former and so they end up with more and more of the latter. They address this imbalance with reorganizations and layoffs. In theory this should work, but, of course, the way it’s done often does not have the desired effect.

    1. wlm says:

      I agree that there should be some mix of more and less experienced people. After all, older people retire, and their replacements have to be trained, at a minimum.

      But drug R&D is not something that’s taught well in academia. So it’s not clear to me how younger, less experienced people will necessarily be “more technologically current” in the pharma business. Does having the latest apps on your phone make you a better pharmaceutical researcher?

      And remember, many trends that came out of academia such as combinatorial chemistry and genome-wide association studies turned out not to be nearly as useful as expected.

    2. anonanon says:

      I agree with the point that Isadore makes that too many of the workforce refresh/renewal strategies within an organization are predicated on growth and that it is markedly more difficult to maintain an optimal workforce in the absence of growth. With a requirement of a fixed number of employees (or even worse a shrinking number) how does an organization continually bring in an adequate flow of new talent/skills/perspectives? While some level of turnover can be healthy, particular when there are internal exits into higher level roles within the company (such that the organization can capitalize on the talent it has helped to develop), turnover at such a level to provide sufficient fresh talent is dangerously close to a tipping point and exceedingly hard to manage. Some firms have chosen the approach of serial forced staff reductions (layoffs) as a draconian solution to this problem but I know of few who believe that this is an effective long-term approach. Are there creative ideas on how to approach this absent growth or is this a flawed concept more generally?

      1. Dr CNS says:

        Can’t pharma growth come from doing better science, which leads to better decisions and opens up new opportunities?

        Sometimes I think we are at a place where getting to the next level takes too much energy and diversity of thought for a workforce that has been demoralized and lived in a risk averse environment for too long.

  8. Kelvin says:

    As long as Pharma R&D productivity/ROI continues to decline, then Pharma will either need to:

    1. Cut R&D costs/investment
    2. Develop a more productive R&D model

    Only one of these solutions is sustainable, and only the scientists can deliver it. The other guarantees that those same scientists won’t be around for long if they don’t.

    1. skeptical says:

      I guess we can’t possibly expect that pharmaceutical executives will be willing to accept slightly lower returns in order to invest in the future? Or to accept that disruptive reorganizations cost money and productivity?

      The pharmaceutical industry is currently very profitable and offers high shareholder yields (http://www.fool.com/investing/value/2015/07/19/7-facts-you-probably-dont-know-about-big-pharma.aspx). If your business is that profitable *and* you can’t find good investment opportunities, you are incompetent as a manager.

      1. Kelvin says:

        Hope you realize that nearly all current growth and profitability comes from annual US price rises on existing products, not from the launch of new products. That won’t last long.

        1. CMCguy says:

          Kelvin well that lack of new products probably is a consequence of bad R&D decisions seeking/enforcing new models and M&A downsizing impacts that have occurred over the last couple decades hence it seems your two possible solutions have been tried and have only quickened the pace of decline rather than promoting new innovation and growth.

          1. Kelvin says:

            Frankly I don’t see how the R&D model has fundamentally changed. It is still based on the same bottom-up sequential reductionist target-based approach to drug discovery, and ultimately restricted by our limited understanding of human biology and disease. So no, I don’t agree that trying “new” models has caused diminishing productivity. The industry has merely been distracted by incremental improvements and reorganizations – rearranging deck chairs on the Titanic as the ship slowly sinks with the law of diminishing returns, which applies to every model of value creation as the best opportunities are prioritized and exploited first.

          2. Al says:

            Heavy M&A activity is to be expected in any overpopulated industry that is in secular decline (such as steel, auto, retail)…why should pharma be any different? The industry has for far too long been hugely geographically and politically fragmented, and horrendously inefficient as a result: this inefficiency was not obvious because of ridiculous pricing power that made up for the scores of hugely expensive failures.

          3. CMCguy says:

            Kelvin I too am not sure the fundamental R&D has changed, except perhaps in location of efforts with reliance on smaller less complete organizations and heavy outsourcing creating shifting of certain costs and intro of unproductive transitions. May be we are talking about the same thing as the distraction of incremental improvements often came out of many attempted paradigm shifts to reinvent how to find and develop drugs, including some that appeared to better align with the biology and only (re)taught how limited knowledge truly was. I am not saying a better model is not needed just that many of the replacements tried so far have been adequate and did take extensive resources almost to the exclusion of more established approaches which (Big Assumption) could have resulted in a few new drugs, albeit relatively would have remained inefficient.

            AI IMO M&A got out of hand destroying too many productive sites/people in a big is better mentality prompting chase of only perceived Block Busters. I could be fantasizing think many of the remote locations, particularly medium broadly capable units/organizations probably were majorly responsible for leading innovations. Your are correct that the pricing has allowed industry inefficiency to operate largely unchecked but consolidation as solution seemed to only be a shell game that did not contribute to increase in productivity and more likely lead to real reductions, both immediate and long term.

        2. skeptical says:

          No, I’m not familiar with the details of pharma balance sheets. Do you have a link?

          At any rate, current revenues certainly won’t last unless you invest in new products. Even if it requires a decrease in dividends/share buybacks and profit margins for a while. You can’t cut your way to profitability in the long term.

          1. Kelvin says:

            I think we’re saying the same thing – cuts are unsustainable and won’t save Pharma in the long term. But at the same time, Pharma needs a new R&D model to create more value in the process of developing new products, because destroying more value with R&D (which is where we’re heading, if we aren’t there already) is also not a sustainable solution.

  9. Drug Developer says:

    Derek (and others): What do you think of the benefits of locating or relocating pharma R&D in Cambridge MA vs. the costs?

  10. Anon says:

    How is Takeda Vaccines fairing in Chicago?

  11. Ed says:

    Why would the pharma industry be sustainable forever? With the possible exception of infectious diseases, medical needs are increasingly being met, leading to niche markets, very high payments for treatments, and more challenging business propositions.

  12. Ed says:

    All the bench scientists in chemistry gone at San Diego site?

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