Once again, a cost-conscious big pharma company is axing research and development operations around the world — but hiring more scientists and drug developers in the Boston area.
This time it’s Swiss pharmaceutical giant Novartis AG, which plans to cut about 500 research jobs elsewhere while adding about 175 jobs at the company’s global research headquarters in Cambridge. The jobs at the Novartis Institutes for BioMedical Research here will include some new hires along with other researchers moving from Horsham, England, where Novartis is closing a respiratory diseases research site, and Emeryville, Calif., where it is shutting down a cancer research program.
Novartis will also be shuttering a small dermatology research site in Vienna and a unit at its San Diego campus that makes protein-based biologic drugs.
“This is not a pleasant decision for the people affected,” Novartis research chief Mark C. Fishman said of the restructuring, which was disclosed to employees Wednesday. “But our goal is to continue to make great medicine, and we have to be efficient to do it. This is not an attempt to cut research and development. It’s an attempt to reallocate resources in a more efficient way.”
The new positions in Cambridge will be a boost to the local life sciences sector at a time when another growing drug maker, Vertex Pharmaceuticals Inc., is eliminating 175 jobs because of a sharper-than-expected drop in sales of its lead drug to treat hepatitis C.
Novartis has become one of the largest biopharmaceutical players in the Boston area in recent years, employing about 2,400 people in Cambridge, including 1,800 in research. The new respiratory and oncology scientists are expected to work in Novartis buildings along Massachusetts Avenue or in nearby Technology Square, outside Kendall Square. Globally, the Novartis Institutes for BioMedical Research has about 6,500 employees.
The move by Novartis is the latest in a string of cutbacks by global drug makers over the past few years — including Pfizer Inc., London-based AstraZeneca, Sanofi SA of France, and Shire PLC of Ireland. But while the companies have scaled back operations at other research locations, especially in Europe, their Massachusetts operations have largely been spared. Some drug makers, notably Pfizer and Sanofi, have grown local operations through consolidation elsewhere.
For much of the past decade, even as other companies have pulled back on funding for research, Novartis has been expanding its network of research labs, focusing on early-stage research and medicines that might treat smaller numbers of patients but also yield insight into ways to fight other diseases. It has also struck academic and commercial partnerships in fields ranging from cancer and muscle growth to cardiovascular and infectious diseases.
Novartis still spends about $9 billion a year on research and development, more than almost any other large pharmaceutical company. But the restructuring signals a broader realignment in which the company will take a more focused approach — creating smaller operations in Cambridge than the ones it is eliminating in the United Kingdom and California — while continuing to work with partners on new frontiers in biomedical research.
“Science keeps evolving, and we need to keep investing in new directions,” said Fishman, a former Massachusetts General Hospital cardiologist recruited in 2002 to run Novartis’s global research operations. “What Cambridge offers is a particular advantage not only in the talent pool but it has access to the academic research at the institutions in Boston.”
For example, he said, “In Cambridge, a lot of the fundamental work we do is in the field of genetics. And we work very closely with institutions like the Broad Institute.”
With the closure of the Novartis research site in England, the Novartis Institutes for BioMedical Research will keep research sites in Cambridge and Basel, Switzerland, and satellite sites in East Hanover, N.J., San Diego, Emeryville, Italy, Shanghai, and Singapore.
Fishman said the net job reductions from the restructuring may total only about 325 after Novartis completes hiring in Cambridge. And he said the company may begin adding more researchers again — in Massachusetts and other sites — as early as next year.