Roche has decided to consolidate activities within its research and early development division, resulting in the closure of the company’s Nutley, N.J., site. Research and development activities will be consolidated at the existing sites in Germany and Switzerland, focusing on oncology, virology, metabolism and neuroscience.
The resulting savings from the global site consolidation, related infrastructure cost, the bundling of support functions, as well as shifts in the portfolio will allow Roche to reallocate resources to the growing number of clinical programs. The reorganization will stabilize the company’s R&D costs despite a strong increase in the number of clinical development projects in the last 18 months. As a result, the financial outlook for 2012 remains unchanged.
“Our R&D programs were exceptionally successful over the last 18 months, with 24 out of 28 late-stage clinical trials delivering positive results. The overall number of programs in clinical development has grown substantially,” said Roche CEO Severin Schwan. “The planned consolidation of our research and early development organization and the refocusing of R&D activities in Switzerland and Germany will free up resources that we can invest in these promising clinical programs while also increasing our overall efficiency.”
The closure is expected to result in a reduction of around 1,000 positions. The transferred activities will be largely absorbed by the existing sites in Switzerland and Germany with an increase of about 80 positions and is planned to be completed by the end of 2013.
“In its 80-year old history, our Nutley site has made significant contributions to Roche’s success,” said Schwan. “We will do everything we can to find socially responsible solutions for the employees affected by these changes.”
Roche’s U.S. subsidiary Genentech based in San Francisco will not be affected by the reorganization. Roche will also maintain its presence on the East Coast with a newly planned Pharmaceuticals Translational Clinical Research Center of about 240 positions. Currently, a location is being identified for the center, which will focus on translational clinical research to support Roche U.S.-based clinical trials and early development programs, support and maintain Roche interactions with the FDA and enhance Roche’s collaborations with U.S.-based partners, such as academic institutions and biotech companies. The new center is planned to be operational by early 2013.
Roche will publish details of the expected financial impact of the planned measures, in particular one-time costs associated with the closure of the Nutley site, as part of its half-year results announcement on July 26.