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Business and Markets

Merck Cuts Back – Again

Yesterday Merck announced to its employees that it’s going through another round of contraction and rearrangement. They don’t seem to have announced it to anyone else, though, so here are the details as I have them:

The North Wales, PA site is being closed (the screening operations there are moving to Kenilworth). New Jersey discovery chemistry (Kenilworth and Rahway) is being cut by 20%, and Rahway’s med-chem is entirely moving to Kenilworth over the next few months. Disease area biology in Kenilworth is shutting down (not sure what the ramifications of that one might be). I’m told that some people will be offered a chance to move to the Boston or Bay area sites, and all of these decisions will be made by the end of September. And apparently they’ve also told everyone that more changes will be coming in the next few weeks, so I’m sure that’s calmed everything down as well.

Anyone with more details is welcome to add them in the comments, but that’s what I have now. . .


Update: comment from Merck, which is about what you’d expect.

35 comments on “Merck Cuts Back – Again”

  1. anonymous says:

    Derek: About your statement “And apparently they’ve also told everyone that more changes will be coming in the next few weeks, so I’m sure that’s calmed everything down as well.” Seriously? If I am a medicinal chemist, I am screaming!

    1. Matthew Hird says:

      Pretty sure that comment was dripping in irony.

  2. These people are morons says:

    Cardiovascular moving to California & not everyone is going to be asked to go. Infectious diseases moving from Kenilworth to West Point. Core Pharmacology being broken up; therapy areas now responsible for their own in vitro & in vivo work (bad idea BTW). Everyone not layed off outright (i.e. N. Whales folks, Pharmacology) get to bid for ~70 positions that will be available when Kenilworth re-established as center for screening, biologics, etc.
    All in an effort to increase the Merck footprint in MA & California because that will make everyone smarter. Yup- that will work. Carnage be damned!!

    1. hrafn says:

      You know the industry, follow the rest of the lemmings. Everyone has a research facility in Cambridge, then we better too even if it is 10 years late. Novartis moved all of their research operations to Cambridge must be about 14 years ago, obviously that worked out fabulously, look at all of the incredible new drugs discovered there, uh, wait, you mean there aren’t any??

      1. CH says:

        Not to defend Merck, but they have been in Boston for 10+ years.

    2. Frank Claire says:

      Steady supply of cheaper entry-level PhDs?

  3. Paul Jansen says:

    Merck, has already tried therapy areas doing their own pharmacology, and then they stopped it. So I am sure it will work this time. Sigh, 7 “re-orgs” in 8 years. I’m surprised anything gets accomplished there.

  4. Curious Wavefunction says:

    Sad. How come nothing’s moving up to Boston?

  5. Photoskeptic says:

    looks like all that photocatalysis is really doing wonders for their bottom line…

  6. anonymous says:

    @These people are morons-they will move to another location and lay them off! A trich Pfizer and others pioneered!

    1. anonao says:

      Why would they care, people at the top get their money whatever happens (and big bonus if they are asked to move).Shareholders will be happy, and pharma “evil” image will not go away (money money money)

      1. anon says:

        Where is Bernie when you need him?

        1. Isidore says:

          Ah, yes, Bernie. Compound the private sector’s misguided decisions with government’s stupid actions. It has worked wonders where it has been tried.

        2. Bagger Vance says:

          “My business model isn’t working! Quick, get me a communist to fix it!”

        3. anone says:

          Bernie is kissing Hillary’s ring.

    2. Pfizer Joe says:

      you bet–Pfizer will do the same again

  7. SP says:

    I’ve heard from a few automation and instrument vendors that most of their revenue these days isn’t from selling new systems, it’s providing services to relocate and re-relocate existing systems every couple of years due to re-orgs.

  8. Dr CNS says:

    Well… MRK stockholders seem to be happy with how things are going…

  9. Isidore says:

    I recall the opening remarks of a talk by professor Charles Weissmann (then at Zurich, now at Scripps Florida), who was the first to clone and express interferon, at a Whitehead Institute symposium quite a few years ago. He began by saying how honored he felt to have been invited to speak, as one’s intelligence drops by the square of one’s distance from Cambridge, MA. Evidently Merck and others have taken to heart this bit of Swiss humor.

  10. Nick K says:

    The Great Pharma Recession seems bottomless….

  11. Anonymous Researcher snaw says:

    Again with the magic Cambridge Biotechy Pixie dust!

    1. Dr. Manhatten says:

      “Again with the magic Cambridge Biotechy Pixie dust!”

      Yeah, it’s like a rush of blood to the head! The Reality Distortion Field that is Cambridge rearranges the very firing of the neurons. All of a sudden one sees what has eluded one for years, and yea, verily, one can immediately go forth and create novel drugs (while living in downsized quarters because Cambridge is hot and everyone is moving there driving up real estate prices).

      And Cambridge is a hotbed of medicine….oh, wait, big institutions with massive research underway are Harvard Medical School, Dana Farber, Brigham & Womens, and Beth Israel Deaconess, all over in the Longwood Medical Area in Boston, some 30-45 minutes away by the antiquated Green Line. Sure MIT & Broad are in Cambridge, but a lot of the medical action is actually over in Boston. To their credit, Merck has a center right next to HMS, but I don’t see any signs of that being boosted in the announcement.

  12. Kriggy says:

    Isnt it just big waste of time? They will do it again int 5 years or so.. Shareholders get their money and stuff but do those “reorganizations” offer any real benefit?

  13. Andrew Lund says:

    Given that development timelines exceed tenure in post, individuals profit through *change*, rather than necessary or effective change.
    It’s utterly depressing, and odd how as scientists we ask ‘What has been done before that might help me?’, but as soon as we reach the C-level, there is no history.

  14. Anonymouse says:

    Here’s an old in the pipeline post on the same company, but still germane today as site closing decisions are still very life-changing.

  15. Former Cube says:

    I will be disappointed if they don’t call it “the Merckrobiome”.

    1. john adams says:

      That’s a shitty idea 🙂

  16. Bubba Zinetti says:

    Can some one explain the thinking behind moving to South SF? I have tried to understand, but I just don’t see the end game. Won’t it cost more in the long run? Higher salaries due to the cost of living. Does Merck hope to poach people from Roche (Genentech), Excelesis, Portola, etc…

    1. Happily ex-Merck says:

      Mathai Mammen is based in the Bay Area. Lots of biologics talent is still there rather than in greater Boston. Merck’s vision to grow its Bay Area presence makes strategic sense. Others who aren’t there will miss out in the long run particularly as tech and biotech further synergize.

  17. Phil says:

    The Boston/SF thing makes sense for twentysomethings who want to go to cool restaurants and bars, and don’t mind living with roommates, but I would expect a 30/40-something with a spouse and kids to have zero interest in trading a nice house in suburban Philly or the RTP for a tiny apartment in some yuppie playground designed for childless young professionals. Seems like a great way to fill entry-level jobs, and a crappy way to get experienced people (not just the older ones companies don’t want, but 30-somethings too).

  18. ThruAGlassMurckly says:

    Yeah, Merck has long been fascinated by the appeal of the startup ethos, though it’s not clear how much a startup any fortune 100 company could ever be when communing with the pool of sexy techies in their high rent enclaves. Yes, you’ll gain the attention of those folks who want to live in techno nirvana. But can you get them to join and stay without the other attractions of a startup, like a lack of stuffed shirt upper management, stock options, and an IPO? Methinks not.

  19. runner runner says:

    look who runs the operation? Is anyone really surprised with the “move” to Boston and SF? I’m not, Continue to dive in the deep end with bio tech, the sexy thing to do when tablet business runs dry as it has. Look at the markets Merck plays in~ diabetes, oncology (1 product with additional indications hopefully), hospital business and vaccines.

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