Merck & Co. to Cut or Shift 360 East Coast Jobs, Add 100 in the Bay Area

Merck & Co. to Cut or Shift 360 East Coast Jobs, Add 100 in the Bay Area July 13, 2016
By Mark Terry, Breaking News Staff

Merck & Co. announced that it is cutting research-and-development jobs at three locations on the east coast: Kenilworth and Rahway, New Jersey, and North Wales, Pennsylvania.

The company reports it is slashing about 360 jobs from those three sites. Some employees will be transferred to new facilities in the San Francisco Bay Area, which along with Cambridge, Massachusetts, is becoming the center of life science research. Although a detailed breakdown hasn’t been disclosed, a Merck spokeswoman indicated than less than 10 percent of approximately 3,600 workers in early-stage research and development at the three locations will be cut.

Merck is also expanding in the Cambridge area. Despite the job cuts and relocations, all three facilities will stay open.

The spokeswoman told the Wall Street Journal that Merck hopes to acquire “earlier access to emerging external science and technology to augment our leading discovery and development capabilities.”

Company spokeswoman Lainie Keller told The Inquirer that the company “is increasing our investment in exploratory biology in areas where biomedical research is converging, specifically in Cambridge, Massachusetts and the San Francisco Bay area. Unfortunately, these changes will result in workforce reductions as we shift resources and personnel.”

This is an apparent industry-wide shift as life science companies take advantage of a strong university, industry and venture capital presence around Cambridge and San Francisco. As The Inquirer reports, “Last year, Shire Pharmaceuticals moved 500 R&D and sales jobs to suburban Boston from Chesterbrook (Pennsylvania). AstraZeneca has moved or cut more than half the 5,000 jobs formerly located at its U.S. 202 headquarters between Wilmington, Delaware and Glen Mills, Pennsylvania, selling half the campus to JPMorgan Chase, as the British-Swedish drugmaker moved work to Waltham, Massachusetts and Gaithersburg, Maryland.”

Although Merck is cutting or shifting jobs on the east coast, it plans to hire approximately 100 scientists for its cancer and biologics research-and-development interests in the Bay Area. Beginning early in 2017, it plans to move into an interim facility in South San Francisco while it looks for a permanent location in the area.

On June 10, Merck announced it was acquiring San Mateo, California-based Afferent Pharmaceuticals for an upfront payout of $500 million in stock and an additional $750 million based on clinical and commercial milestones. Merck picked up two clinical candidates in the acquisition, AF-219 and AF-130, both of which selectively block P2X3 receptors. P2X3 receptors are associated with sensitization of specific sensory nerves. AF-219 is currently in a Phase IIb clinical trial to treat refractory, chronic cough, as well as a Phase II trial in idiopathic pulmonary fibrosis (IPF) with cough.

AF-130 recently finished a Phase I trial in non-respiratory conditions and there are plans to push ahead with Phase II trials.

The deal was announced only a few days after a federal judge threw out a patent infringement finding Merck had won, and overturned a $200 million jury award. The judge noted that Merck had lied to one of its business partners and to the court, saying the company’s activities were “systematic and outrageous deception in conjunction with unethical business practices and litigation misconduct.”

The case began in 2013. Merck argued that its patents covered Gilead 's hepatitis C drug, Sovaldi, and demanded royalties and licensing fees. Gilead turned down the request and sued to have Merck’s patents invalidated. The jury dismissed the argument and decided that Gilead should pay Merck $200 million, plus future royalties. Merck had sought $2 billion.

Much of the federal judge’s criticism focused on Phillippe Durette, a now-retired patent attorney who worked for Merck.

Back to news