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Pfizer announced earlier today that it was going to cut R&D jobs and abandon its research efforts in the areas of cardiovascular diseases, cholesterol management, osteoporosis, anemia and liver and muscle diseases. The company plans to refocus it drug development in five therapeutic areas including Alzheimer’s; diabetes; immune disorders and inflammation; cancer; pain; and mental illness, including schizophrenia. Also, the company will continue its work on anti-thrombotic agents to prevent blood clots.

The job cuts and refocusing are part of a previously announced plan to cut about $2 billion dollars from Pfizer’s operating budget. Over the past 15 years, Pfizer has gone on an unprecedented buying spree in an attempt to acquire blockbuster drugs and bolster its flagging internal drug development pipeline. Unfortunately, the gamble has not paid off and Pfizer must now attempt to reinvent itself to restore shareholder value and instill investor confidence. 

Unlike many of its competitors, Pfizer failed to invest in and capitalize on early opportunities in the biotechnology industry. The company has been trying to play catch up ever since. To that end, over the past year or so, Pfizer invested in or purchased several small biopharmaceutical companies to demonstrate its commitment to biotechnology.  It may be “too little too late!” Unfortunately, because of a lack of vision and foresight by company executives, many Pfizer employees will have to pay the ultimate price of losing their jobs as the US falls deeper into recession.

Hat tip to Pharmalot and the WSJ Health Blog.

Until next time…

Good Luck and Good Job Hunting!!!!!!!!!

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The Pharmalot Blog reported today that Schering Plough will eliminate 1,000sales jobs or 20% of its sales force by October. This latest round of layoffs is part of a reorganization plan that was announced last year to cut 10% of it workforce by 2012 (although must of the downsizing will occur by 2010). The reorganization was announced shortly after Schering purchased Organon Biosciences and the “wheels came off” of its Zetia/Vytorin anti-cholesterol medication franchise.

In other news, BioJobBlog heard through the grapevine that Merck has been quietly laying off workers (since Labor Day) in an attempt to reduce its workforce by 20% over the next few years. Many very talented people who have been with Merck for years are looking for new jobs.

Finally, Montvale, NJ-based Memory Pharmaceuticals announced that it was laying off 55 workers or roughly 50% of its workforce. The company, which went public in a much heralded IPO in 2004, focuses on developing treatments for cognitive disorders. Although the company has never been profitable, the person who ran the company for the past three years (first as president, then CEO and finally CFO) earned $876,807 last year. Not surprisingly, he will be leaving the company as part of the downsizing initiative.

The ongoing pharma slowdown coupled with this week’s Wall Street meltdown (many people who work on Wall Street live in New Jersey) should make New Jersey a very challenging and interesting place to live in the coming months.

Hat tip to Ed at Pharmalot.

Until next time….

Good Luck and Good Job Hunting (I would avoid NJ)!!!!!!

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As you all know by now, Roche, last month, rocked the biotechnology world by tendering an offer to purchase the remaining shares of Genentech that it doesn’t already own.  The first offer made by Roche was summarily rejected by Genentech because its board felt that the offer undervalued the company.  I have no doubt that Roche and Genentech will eventually agree on a purchase price. That said, when companies are purchased, employees of the purchased company are typically laid-off or re-organized out of jobs. In marked contrast, Genentech announced (as expected) that it would offer virtually all of its 10,700 employees retention bonuses to remain with the company if it is purchased by Roche. These bonuses could cost Genentech as much as $371 million.  It was reported that the retention bonuses will be paid whether or not the merger goes through, and are in lieu of 2008 stock option grants.

Even with the bonuses, keeping employees could be a challenge for Genentech. Many Genentech employees (especially those who have been with the company for many years) are expected to become much wealthier if Roche pays a high price for their stock, particularly if unvested stock options vest immediately. That might mean some employees would no longer have to work for a living or might start their own companies to compete with Genentech. Many small biotech startups in the Bay area were started by Genentech alums.

Regardless of the outcome, Genentech’s retention bonus offer is another example of why Genentech was able to seperate itself from the rest of the biotech pack.  It is evident that CEO Arthur Levinson (one of the company's founders) understands something that many CEOs don’t—that employees are a company’s greatest asset.

Roche’s eventual acquisition of Genentech will signal the end of an era for one of the biotechnology industry’s most successful pioneers. It will truly be a sad day in the biotech world when the deal is finally consummated.

Until next time…

Good Luck and Good Job Hunting (try Genentech next Fall—there will be a mass exodus)

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