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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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February 6, 2006

J&J Shakes Things Up

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Posted by Derek

Well, as one of my readers noted in a comment on Friday, Johnson and Johnson seems to be doing a bit of restructuring in their drug discovery departments. I haven't seen a press release on this from the company yet, and I don't know if they're required to put one out, but it's newsworthy to people like me. Word starting going around at other companies during that working day, and more details have come out since then.

It appears that they're going to shrink their big Raritan, NJ site, at least as far as research is concerned, and consolidate things more in Spring House, PA. If my sources are correct, though, there are several hundred positions that are going to disappear in the process. I should emphasize that I don't have all the details, but that's what it's sounding like.

This is a bit unnerving, because J&J wasn't on anyone's list of companies that were having trouble. It's true that they don't have any of the huge multibillion-dollar drugs that everyone hears about, but they've always seemed like a pretty solid organization. Their presence in the medical-devices market gives them a useful non-pharma revenue stream, although the recent Guidant wrangling shows that that's not exactly a quiet, restful business, either.

Anyone with more information is welcome to add it in the comments section to this post. I hope that the folks affected will be able to land on their feet.

Comments (9) + TrackBacks (1) | Category: Business and Markets


1. LNT on February 7, 2006 9:20 AM writes...

I have a friend at J&J who just got notified on Friday that he was being laid off. He said that they are closing discovery research at Raritan. I heard from him and from another friend at J&J that things at J&J aren't quite as "hunky-dory" as they appear from the outside. The percentange of J&J profits that come from pharmaceuticals is fairly small, isn't it? I wonder if in the long-term J&J will get out of pharmaceuticals alltogether and focus on other parts of thier buisness.

Permalink to Comment

2. Oldchemist on February 7, 2006 10:41 AM writes...

What I've heard mostly agrees with LNT's post, although I've heard that some transfers to Spring House are going to be possible. Even at that, the positions lost seem to be in the 100 - 150 range. I've already received a blizzard of resumes. Is anyone "safe" these days?

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3. EDCi on February 7, 2006 10:42 AM writes...

What happens to most of the people laid off when the companies in this industry restructure? Do they get reassigned to different departments/locations or do they get hired by the other companies in the same business?

Permalink to Comment

4. bob on February 7, 2006 11:38 AM writes...

A collegue of mine's spouse is one of the victims.
Both spring house and raritan are dumping oncology and GI research (so i am told).
few, if any, transfers.
severence is pay period driven, not lump sum.
and i hear a real bear of a "non-compete" severence contract.

Permalink to Comment

5. lynx on February 7, 2006 11:43 AM writes...

Here's the only news item I've seen.
My sources agree with your sources, Derek, and those above. >100 positions lost; some will be offered or allowed to bid on jobs. It's pretty disturbing - and oddly underreported.

Permalink to Comment

6. tango on February 7, 2006 1:59 PM writes...

This is surprising. I agree, J&J certainly wasn't on my radar of big companies in trouble. Any ideas why J&J have had to take this unfortunate step?

Permalink to Comment

7. Dave H on February 7, 2006 3:34 PM writes...

J&J / Janssen transdermal fentanyl went generic in 2005. This may have reduced annual revenue by upto one billion dollars.

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8. heeler on February 7, 2006 6:45 PM writes...

I was looking for info on the new in yahoo finance and saw this ironic report from morningstar -

It states that J&J gets 50% of its profit from drug sales and has a strong pipeline (which is always subjective).

Good luck to the folks from J&J and to the rest of us in this business. Not only is the job market tough these days, but I never imagined when I went to grad school 20 years ago that my profession would be right up there with used car salesmen in the public's eye.

Permalink to Comment

9. tarak on February 7, 2006 8:49 PM writes...

J&J Raritan:
280 positions gone
Severance pay-2 weeks for each year of service.
Job assistance-passing around positions dated June 2005.
Last day is Feb 17.

Permalink to Comment


Listed below are links to weblogs that reference J&J Shakes Things Up:

JnJ as I see it from Heart of the Matter
Perhaps J and J is not in trouble at all and their business model is slightly different [Read More]

Tracked on February 8, 2006 5:09 PM


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