- Merck will lay off research employees at three U.S. sites, continuing its yearslong effort to remake its R&D operations. At the same time, Merck plans to open two new labs in the research hotbeds of Cambridge, MA and San Francisco to better focus on emerging science and discovery.
- The restructuring will affect about 360 workers involved in discovery, pre-clinical, and early drug development at Merck's screening facility in North Wales, PA, as well as at its sites in Kenilworth, NJ, and Rawah, NJ, a company spokesperson said. The North Wales facility will close.
- Merck said the new lab in Cambridge, MA is expected to open in late 2016 and will focus on exploratory research into the microbiome and host-pathogen interactions. The new San Francisco site will work on cardiometabolic disease and oncology discovery.
Merck said the changes would allow the company to have better eyes on external science by expanding its presence in two areas synonymous with cutting-edge biomedical research.
"Within Merck Research Laboratories, we are making some organizational changes within our discovery, pre-clinical and early development area to enable earlier access to emerging external science and technology to augment our leading discovery and development capabilities," a company spokesperson said.
Over the past three years, Merck has substantially trimmed down its workforce, cutting approximately 8,630 positions in sales, administration and research. The restructuring effort was launched in 2013 and also involved a reduction in the company's real estate footprint.
These new changes appear to be focused on shifting resources and capabilities to take advantage of the torrent of new research and development work coming from labs and biotechs in the San Francisco and Cambridge areas.
Roughly 11,900 people are currently employed in research activities across the company. Merck's discovery, pre-clinical, and early development group is made up of around 3,600 employees. Less than 10% of workers involved in those areas would be impacted, including layoffs and employees moving to new sites, a company spokesperson said
Merck has consistently invested around 17% of its revenues into R&D over the past five years, although the dollar amount dedicated to drug discovery and development has shrunk as revenue has slipped. Last year, Merck spent just over $6.7 billion on R&D expenses, down from nearly $8.5 billion in 2011.
As new competition threatens some of Merck's biologic blockbusters like Remicade, the company is counting on a rapid ramp up in sales for its immuno-oncology drug Keytruda, as well as its hepatitis C med Zepatier.
News of the job cuts was first reported by Derek Lowe, writing for his "In the Pipeline" blog.