Claiming that the domestic market undervalues pharma innovation, Merck has decided to pull the plug on all of its R&D efforts in the U.K.
Merck is scrapping its billion dollar plans in the U.K. in a move that will see the pharma giant terminate R&D efforts in the country and leave some 125 employees there jobless.
In a statement confirming the layoffs to Endpoints News and Fierce Biotech, a company spokesperson said that the decision to leave the country “reflects the challenges of the U.K. not making meaningful progress towards addressing the lack of investment in the life science industry.” Successive U.K. governments, the spokesperson continued, have also demonstrated an “overall undervaluation of innovative medicines and vaccines.”
As part of a broader R&D withdrawal, Merck is also pulling the plug on a roughly $1.3 billion construction project that was expected to open 120 posts for researchers and technicians. The pharma will also pull out of existing laboratory facilities at the Francis Crick Institute and the London BioScience Innovation Center, according to the spokesperson. Merck expects to fully end its U.K. R&D presence by the end of the year.
In late July, Merck launched an aggressive cost-cutting campaign to generate $3 billion in savings by the end of 2027. The push, according to the pharma, will help support more than 20 commercial launches of pipeline assets nearing the market.
“We’re looking to reallocate … resources from the slower growth areas of the business to fully fund into the fast-growing areas of our business,” CEO Rob Davis told investors during the pharma’s Q2 earnings call in July. A few days later, Merck announced an 8% workforce reduction as part of the savings initiative, which affected around 6,000 employees .
Merck has implemented several rounds of layoffs this year , terminating 58 employees from its New Jersey headquarters in August and 163 from Pennsylvania in March, in conjunction with the shutdown of a manufacturing site in the region.
