- Bayer is transferring a "large part" of its small molecule research unit in Berlin to Nuvisan, a Germany-based contract research and manufacturing organization, through a partnership announced Tuesday.
- According to the companies, the unit will serve as the base for a new center located on Bayer's research and development campus in Berlin. Bayer and Nuvisan said they'll work together in building the new center, with the unit transfer expected to complete in the middle of this year.
- The partnership comes amid a wider restructuring of Bayer's R&D operations. The company announced in late 2018 plans to exit animal health and eliminate 10% of its nearly 120,000 jobs. Around 1,250 jobs in pharmaceutical R&D or manufacturing were set to be cut, including 350 from a production facility in Wuppertal, Germany, that Bayer spent millions of dollars to expand and modernize before deciding not to use it.
The $63 billion acquisition of Monsanto gave Bayer a crop science business that generates 14 billion euros a year. It also substantially raised the buyer's research and workforce expenses. By the end of 2018, Bayer was shelling out more than 5.2 billion euros on R&D and employing more than 17,000 people — reflecting year-over-year increases of 16% and 23%, respectively.
As such, Bayer turned to restructuring shortly after the deal closed. The aim was to shave down certain pieces of the business and reorient the resources to areas of higher growth potential, namely pharmaceuticals and crop science.
Yet those favored units weren't spared from cost cutting efforts. In addition to the roughly 1,250 job cuts related to pharmaceuticals, Bayer said it would eliminate around 1,100 positions in consumer health, around 4,100 in crop science, plus another 5,500 to 6,000 across various corporate, support and business functions.
In its 2018 annual report, Bayer said reductions in internal pharmaceuticals research would allow for greater investments in collaborative research models and external innovation. The deal with Nuvisan appears to be one such example.
"Nuvisan shares our vision that the new research center can become an important player in research partnering based on the joint know-how and the capabilities of our highly qualified scientists," Joerg Moeller, head of global R&D at Bayer, said in a Feb. 11 statement.
According to Bayer, the Berlin unit has around 400 workplaces and a team specialized in small molecule research. Previously, the company has recorded some of its highest property, plant, and equipment expenses in pharmaceuticals from research activities in Wuppertal and Berlin and from expanding production capacities for Eylea (aflibercept) at sites in Berlin and Shiga, Japan.
While Bayer looks to make its R&D more efficient, it has acknowledged future growth largely depends on developing new medicines and agricultural products. When Bayer announced the thousands of planned layoffs, for example, the company also said it intends to invest tens of billions of euros into R&D between 2019 through 2022.
Nuvisan records about 55 million euros worth of annual sales, according to Bayer, and currently employs around 400. The contract researcher and manufacturer has six sites across Germany and France.