AstraZeneca to establish strategic R&D centers, cut or relocate 4,100 workers
Global biopharmaceutical company AstraZeneca announced plans to invest in strategic R&D centers in the U.K., the U.S. and Sweden to improve pipeline productivity and to establish the company as a global leader in biopharmaceutical innovation.
The proposals are designed to: locate more of the company's scientists close to globally recognized bioscience clusters, making it easier to access world-class talent and opportunities for collaboration and partnerships; bring teams together to improve collaboration and to create a more vibrant environment that focuses on science and the patient; and simplify the company's footprint to reduce complexity and eliminate unnecessary cost.
AstraZeneca's small molecule and biologics R&D activities will be concentrated in three strategic centers: Gaithersburg, Md., Cambridge, U.K.; and Mölndal, Sweden. The proposals are expected to be fully implemented by 2016.
AstraZeneca will invest around $500 million to establish a new, purpose-built facility in Cambridge, a world-renowned center for life sciences innovation with strong links to globally important research institutions in London. Consolidating the company's U.K.-based small molecule and biologics research and development at a new center will build on AstraZeneca's protein engineering capabilities already based in the city. Cambridge will also become AstraZeneca's new global corporate headquarters.
The site of MedImmune's headquarters and the primary location for AstraZeneca's biologics activities, Gaithersburg will also become home to much of the company's U.S.-based global medicines development activities for small and large molecules and will accommodate some global marketing and U.S. specialty care commercial functions.
AstraZeneca's site in Mölndal, Swedem, will continue to be a global center for research and development, with a primary focus on small molecules.
Globally, over the 2013-2016 period, the proposed investment and associated changes will lead to the relocation of nearly 2,500 roles and an overall estimated reduction in headcount in the region of 1,600 roles. The vast majority of these will be in the U.K. and the U.S. The program is expected to incur $1.4 billion in one-time restructuring charges, of which $800 million are likely to be cash costs. In addition, the company will invest approximately $500 million in establishing the new center in Cambridge. Annualized benefits of approximately $190 million are expected by 2016 for the program.
"The changes we are proposing represent an exciting and important opportunity to put science at the heart of everything we do because our long-term success depends on improving R&D productivity and achieving scientific leadership,” said Pascal Soriot, CEO of AstraZeneca. "This is a major investment in the future of this company that will enable us to accelerate innovation by improving collaboration, reducing complexity and speeding up decision-making. The strategic centers will also allow us to tap into important bioscience hotspots providing more of our people with easy access to leading-edge academic and industry networks, scientific talent and valuable partnering opportunities."
The consolidation of AstraZeneca's global R&D footprint and the creation of a new headquarters will impact on other sites over the next three years, particularly in the U.K. and U.S.
The main changes are as follows:
- Alderley Park, Cheshire, U.K.: Under the proposals, R&D work will no longer be carried out at Alderley Park. Approximately 1,600 roles will relocate from Alderley Park, with the significant majority going to the new center in Cambridge and the remainder to the company's nearby Macclesfield manufacturing facility or other AstraZeneca sites overseas. At least 700 non-R&D roles are expected to remain at Alderley Park. AstraZeneca is committed to exploring all options to ensure that Alderley Park has a successful future.
- Wilmington, Del.: With the exit of the global medicines development group and the relocation of global marketing and U.S. specialty care commercial roles, about 1,200 roles will leave Wilmington. There will be a net increase of approximately 300 roles in Gaithersburg. The changes will lead to an estimated overall reduction of about 650 positions in the U.S.; while around 170 will relocate to other AstraZeneca sites in the U.S. or overseas. Wilmington will remain the North America commercial headquarters, with a population of about 2,000 at the AstraZeneca site.
- London: The majority of corporate and global commercial roles based in London are expected to move to the new center in Cambridge with some going to other AstraZeneca sites. Following the transfer of the company's headquarters to Cambridge, AstraZeneca's Paddington office will close by 2016. Currently, around 350 roles are based in London.
"I recognize that our plans will have a significant impact on many of our people and our stakeholders at the affected sites,” said Soriot. “We are fully committed to treating all our employees with respect and fairness as we navigate this important period of change.”
Final estimates for program costs, benefits and headcount impact in all areas of the business are subject to completion of applicable consultation processes in accordance with local laws.