Drug maker Shire plc Wednesday said it will move more than 500 research and commercial jobs to its US headquarters in Lexington from a site in Chesterbrook, Pa., catapulting the Irish-based firm into the ranks of the largest Massachusetts life sciences companies.
Shire's buildup of its Lexington campus, which already has about 1,300 employees, comes one month after biopharma giant AbbVie Inc. terminated its $55 billion agreement to buy Shire, ending what would have been one of the year's largest corporate takeovers.
Chief executive Flemming Ornskov said in an interview that the company is refocusing on its strategic plan to expand through internal growth and acquisitions and to consolidate global business operations in larger sites such as those in Massachusetts and Switzerland.
"We're expanding the number of therapeutic areas that will be managed in Massachusetts," said Ornskov, a Danish doctor-turned businessman who is based in Lexington himself. "It will be the US operations center. Strategically, we're trying to align ourselves more with a biotech perspective and that fits in with Massachusetts.
"As we've evolved, we're becoming more biotechy in our approach," he said. "We think that being in the cluster of the Greater Boston area will help us. What has happened over the past decade is this has become the Mecca for life sciences in the US."
Other global biopharma companies, including Pfizer Inc, Sanofi SA, Novartis AG, and Amgen Inc., also have been expanding their operations in Massachusetts in recent years while cutting back research and other business functions elsewhere.
In the past several months, Baxter International Inc. said it would open a biopharma research center in Cambriding employing at least 400 people, while GE Healthcare said it will base its US life sciences headquarters and add 220 jobs in Marlborough.
Shire could be eligible for up to $12.5 million in state tax credits over the next two or three years if it creates 500 new jobs, said Susan Windham-Bannister, president of the Massachusetts Life Sciences Center, a government agency that dispatched representatives to talk to the company about an expansion. Massachusetts already has given Shire tax credits totaling just under $20 million since 2009 as it has enlarged its footprint in the state, she said.
Windham-Bannister said the talks with Shire about the latest expansion began before its agreement to be acquired by AbbVie, were put on hold after that deal, and resumed when the transaction collapsed.
"What they [Shire] were impressed with is the fact that in Massachusetts there is a government commitment to life sciences and someone that is paying attention to the ecosystem," she said.
Shire established a beachhead in the Bay State when it acquired Cambridge-based Transkaryotic Therapies Inc. for $1.6 billion in 2005. Since then, its Massachusetts operations have specialized in making drugs to treat rare genetic disorders, competing with Sanofi's Genzyme division in Cambridge to market treatments for the enzyme deficiencies Gaucher and Fabry diseases.
Going forward, Ornskov said, the Lexington campus will also house specialty drug programs that have been managed in Chesterbrook, about 30 miles west of Philadelphia, including its neuroscience and gastrointestinal disease research. Shire's site in Chesterbrook now employs 978 workers, many of whom will be offered new jobs in Massachusetts, he said.
Shire said the move will save the company $25 million annually starting in 2016.
The jobs being moved are in research and development, sales and marketing, human resources, legal services, business development, communications and other areas, Ornskov said. He said Shire plans to house some new employees in its current buildings and is also looking for more space to lease near its Lexington campus.
Ornskov said the Chesterbrook site has many talented employees whom he hopes will make the move. But he said Shire also is prepared to hire new employees in Massachusetts to fill positions of those who choose to stay in Pennsylvania. He said there would be no special effort to poach workers from Genzyme, where employees face uncertainty following the abrupt firing of Christopher A. Viehbacher, the chief executive of Genzyme's parent company.
"We don't like it when a company targets our employees, so we won't target any specific company," Ornskov said. "We will search broadly for talent."
Ornskov noted that Shire will receive a $1.6 billion breakup fee from Illinois-based AbbVie, which had planned to adopt Shire's address in Dublin for tax purposes but backed away from the deal after the US Treasury Department said it was changing the rules to make such tax moves harder.
"We have a little more to invest in innovative medicines that can make a difference in people's lives," Ornskov said.
He also said Shire remains interested in buying smaller companies if the right opportunity presents itself. "We're an acquisitive company," Ornskov said. "And if we were to do further acquisitions, we would concentrate the US part in Massachusetts."
Despite the breakdown of Shire's plan to sell itself to AbbVie, Ornskov said the future looks bright for his company, citing strong financial results and progress in moving experimental medicines through its pipeline.
"Our team has kept growing in the path of all this distraction," he said. "That speaks volumes about the people at Shire."