Merck to Eliminate Nearly 500 Jobs in Early 2020 Due to Shifting R&D Focus

Halloween horror is descending on the Philadelphia suburbs. This horror is not in the form of a serial killer slasher, but rather in job cuts. Merck will slash about 500 jobs in early 2020 at two Montgomery County facilities, as well as in some other states, Pennsylvania’s Morning Call reported.

According to the report, the majority of the cuts will occur in the company’s Human Health Division and are expected to begin Jan. 3 and conclude Jan. 16, 2020. Merck spokesperson Pamela Eisele told Morning Call that the cuts are due, in large part, to a shifting R&D focus of the pharma giant. Many of the workers who will be eliminated are remote employees who are based outside of Pennsylvania but some office-based sales personnel will be affected by the cuts. Additionally, Eisele said a “small amount” of marketing employees will be cut,” Morning Call reported.

With about 12,000 employees in the area, Kenilworth, N.J.-based Merck is one of the largest employers in the Lehigh Valley region of Pennsylvania. That is about half of all Merck employees in the United States. There are approximately 25,400 employees in the United States and Puerto Rico, Morning Call noted, with about 69,000 global employees. Earlier this year Merck announced multiple expansions of some U.S. facilities, including a $1 billion expansion to its manufacturing facility in Elkton, Va. and plans to build a new manufacturing site in Durham, N.C. Both sites are aimed at supporting the production of Human Papillomavirus (HPV) vaccine Gardasil.

While Merck is slashing those 500 employees, Eisele said the company is adding new positions in strong growth areas, such as oncology. Those employees who are impacted by the January cuts will be able to apply for the new positions. Eisele stressed that the expansions in oncology are not part of a restructuring for Merck, but are “part of ongoing companywide efforts to sharpen Merck’s focus on innovative research and development that addresses significant unmet medical needs and on our best opportunities for growth,” Morning Call reported.

Merck’s oncology focus has grown exponentially, particularly as its vaunted checkpoint inhibitor Keytruda continues to earn multiple indications from regulatory bodies across the globe. Last year, Keytruda generated $7.2 billion but its revenue projections are expected to grow exponentially. In fact, some analysts have pegged Keytruda to take over the spot of top-selling drug that is currently occupied by AbbVie's Humira. Sales of Keytruda are already forecast to hit $10 billion by the end of this year.

Keytruda has been approved more than 22 times since 2015. In August, BioSpace took a deep dive into Keytruda and the impact it has had on treating multiple types of cancer, including melanoma, non-small cell lung cancer, small cell lung cancer, head and neck cancer, classical Hodgkin Lymphoma, primary mediastinal large B-cell lymphoma, urothelial carcinoma, microsatellite instability-high (MSI-H) cancer, gastric cancer, esophageal cancer, cervical cancer, hepatocellular carcinoma, Merkel Cell Carcinoma, and renal cell carcinoma.

During an Investor’s Day conference in June, Merck's Chief Commercial Officer Frank Clyburn said in a short time, Keytruda has become a foundational cancer treatment. “We have activity across 25 different cancer types… and Keytruda is changing the way in which patients are being treated today,” Clyburn said at the time.