August 11, 2015
By Alex Keown, BioSpace.com Breaking News Staff
KENILWORTH, N.J. – Pharmaceutical giant Merck & Co. has slashed more than 85 percent of the positions targeted for elimination under its 2013 restructuring plan, Gen News reported this morning.
Merck has eliminated “approximately 7,290 positions” since the restructuring plan was announced, the company said in its 10-Qc filing. The positions include full-time employees, independent contractors and vacant positions.
In 2013 Merck targeted $2.5 billion in cuts in annual operating expenses by the end of 2015. At the time the cuts were announced, Merck Chairman Kenneth Frazier said the initiative to sharpen the company’s commercial and research and development programs “will make Merck a more competitive company, better positioned to drive innovation and to more effectively commercialize medicines and vaccines for the people who need them.” Merck officials expect the majority of savings from the implementation of the initiative will come from marketing and administrative expenses and research and development.
During the first half of 2015 Merck has eliminated 1,195 positions, the company said. Positions eliminated were from multiple departments and divisions, including research and development, sales and administrative.
The eliminations have a pretax cost of 217 million for the first half of 2015, the company said.
After acquiring Cubist Pharmaceuticals, Inc. in January, in March the company said it would eliminate the company’s 120-employee drug discovery department in Lexington, Mass.
The termination of that department cut about 20 percent of Cubist’s 600-person Massachusetts workforce. Lainie Keller, director of global communications at Merck, said the decision came as Merck took a closer look at its asset picked up in the Cubist deal. She said all of Cubist’s drugs will continue to be developed, with those in pre-clinical testing moving to other sites, and those in clinical trials seen through to completion. Keller added a 450-employee research center in Cambridge, Mass.’s Kendall Square and a Boston-based business development center are also under review.
In June Merck announced that it would terminate an unknown number of independent contractors at the company’s manufacturing site in central North Carolina, casualties of the company’s consolidation plan.
While the company has been streamlining its employment, Merck has been making several deals to expand its pipeline. In July Merck enhanced its oncology pipeline with the $605 million acquisition of privately-held Israeli biotech company cCam Biotherapeutics, which is focused on the development of cancer immunotherapies. That acquisition added the company’s lead product CM-24, a “checkpoint” protein that is being evaluated in a Phase I study for the treatment of advanced or recurrent malignancies, including melanoma, non-small-cell lung, bladder, gastric, colorectal and ovarian cancers. Merck is certainly hoping CM-24 will show the same promise as Keytruda, which has been shown effective in treating three kinds of cancers -- melanoma, lung cancer and mesothelioma.
