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July 13, 2006
J&J Shrinks Their Labs Again
I'm starting to wonder what Johnson & Johnson is up to with their research departments. Earlier this year they had layoffs and reorganizations on the East coast, and now they're announcing similar cutbacks at their sites in California.
J&J had bought Scios in 2003, and it looks like that site is no more. Some employees are being shifted to other sites, but several hundred jobs are vanishing in the process. There had been some layoffs there at Fremont back in February, but at the time there was plenty of talk about how R&D wasn't being touched. Well, it's being touched now. Jobs are also being lost at J&J's Alza subsidiary.
One problem is that Natrecor, which is the product that made Scios, has been running into potentially severe safety problems since last year, and sales are correspondingly dropping. (And as bad as the current cuts are, this could have been even worse for Scios if they'd remained an independent company taking a hit to their lone moneymaker). Ironically, Natrecor had a rough time even getting through the FDA in the first place, and it was only due to the persistance of the Scios people that it became a success for a few years.
So, what's J&J's strategy? They seem to be doing a lot of big collaborations and inlicensing deals, but they're scaling back their in-house research pretty drastically, at least by the standards of profitable big pharma companies. Is this their new business model?
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