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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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August 5, 2008

Roche Palo Alto: What's Going On?

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Posted by Derek

I've just been told (by a reliable source) that something big is up with the Roche-Palo Alto site. I don't know if this is part of their bid for Genentech or what, but the word "closing" has been mentioned. I hate to pass on news like this with no more details, but something does appear to be going on. Anyone with more details, please add them in the comments section.

So much for not posting on my vacation - I haven't even finished packing for my flight yet. What a year this is for the industry, and it's only August. . .

Comments (32) + TrackBacks (0) | Category: Business and Markets


1. Green Koala on August 5, 2008 8:19 PM writes...

To continue the unsubstantiated rumor: A current-colleague/former-Roche Palo Alto employee mentioned that indeed the Palo Alto location was closing and that some employees were being given options to move to DNA or Nutley.

Surprisingly, I had a well-known headhunter in the med chem world tell me that people were finding good jobs, even during these times; they just had to be able to relocate. Don't know how general or realistic that statement is though.

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2. Anonymous on August 6, 2008 12:21 AM writes...

I thought that this was common knowledge at this point. If you read through the press release of the original Roche/Genentech offer, you see a mention of Palo Alto's virology research relocating to SSF and inflammation moving to Nutley.
It states that after the merger, "With Genentech's site in South San Francisco and Roche's New Jersey-based campus, the U.S.
will be home to the biggest research and development centers within the Roche Group."

In a comment on a previous post here, there is the details for med chem: (I can't post the link, but it's comment #7 in the Job seekers post)

"Med chem moving to either Nutley or Basel", they will find out Sept. 3.

Palo Alto is definitely closing and they are starting the transition of some people to Nutley before the Genentech situation settles.

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3. Jose on August 6, 2008 12:57 AM writes...

Green Koala- M.M. must be thinking, "well, gosh, should I get the M3, or should I go for the AMG? And what color leather would look nice?" :)

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4. Petros on August 6, 2008 2:07 AM writes...

There have been a lot of reports of Roche closing Palo Alto and also its exiting the HIV area. since virology has not long been in California following Roche's closure of Welwyn and the failure of nearly all staff their to transfer from the UK this is somewhat ironic.

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5. sciwriter on August 6, 2008 7:44 AM writes...

The press release announced the transition of Palo Alto employees to South San Fran and Nutley, and in their conference call to discuss the acquisition, Humer said the site would eventually be closed. Less relavent to the folks perusing this site, but they are also planning to close manufacturing at Nutley.

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6. zeke on August 6, 2008 10:06 AM writes...

In honor of your time off....

To quote the former COO of a long-dead Biotech I used to work for:

"Holidays, weekends and vacations do nothing but decrerase employee productivity".

And he meant it.

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7. vasili on August 6, 2008 1:34 PM writes...

"What a year this is for the industry..."

Indeed... See what's happening at the Colonel's house:

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8. WC on August 6, 2008 2:26 PM writes...

About a month ago, I got a call from a recruiter and she was searching for a VP of chemistry for Roche Palo Alto. Obviously she wasn't in the loop.

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9. JC on August 6, 2008 2:30 PM writes...


in response to Anonymous' comment, i am just wondering why the "magic date" september 3rd? does that only apply to med chem folks or the rest of them as well?

thanks, jc

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10. Anonymous on August 6, 2008 3:38 PM writes...


I'm not sure who Sept. 3 applies to, but I believe it's the whole site (at least the next major info update). I think many people there are waiting until then to try to figure out if they will have a position or be out.

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11. Will Scott on August 6, 2008 7:10 PM writes...

Hello All,

As a former RocheBioscience/Syntex employee, I received a pension statement yesterday (Aug 5th) saying that all personal (including the pension office) will either be in South SF or Nutly, NJ. The letter said the Palo Alto site will close but no date has been set. It also said some employees will be moving to other sites.

I talked to a coworker at my place of employment today, he said last week, RocheBioscience persons knew of the layoffs coming.

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12. Petros on August 7, 2008 1:25 AM writes...

Yet Evaluate Pharma has predicted that Roche will be no 1 Pharma co in 2014 (no 2 in 2012)


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13. HelicalZz on August 7, 2008 10:13 AM writes...

First - Derek, consider having a 'guest host' blog in your stead while on vacation (LOL).

Second - Since we are on-topic with cuts and job losses, I expect that the Lily-Covance deal would have risen to blog fodder for the week. I've commented in the past that the jobs pharma is reducing are more than likely headed to the CRO / CMO industries as reliance on outsourcing continues to trend upwards. Here we have a situation where the CRO (Covance) signed a deal with Lilly which included the purchase / transfer of an entire Lilly facility. This certainly saves on the whole time consuming and gut wrenching firing / hiring process. Lets see if this model catches on (fingers crossed).

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14. Jose on August 7, 2008 11:46 AM writes...

Errr, what??? A CRO ponies up $1.5 B to buy labs from big pharma, so the big pharma can outsource back to its own labs and former employees? We have now officially gone "down the rabbit hole."

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15. skeptic on August 7, 2008 3:53 PM writes...

Why the surprise? Covance will get rid of some employees, offer the remainder a position at a lower salary with lower benefits, most will accept because they don't want to leave Indiana, and Lilly will get the same quality work done as before, at a lower cost, while Covance fills its pockets as well. What's to be surprised about?

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16. Jose on August 7, 2008 4:13 PM writes...

The business model makes perfect sense- same research by the same scientists for less money...I am just amazed they would be so openly mercenary (although, I shouldn't be). Wait until the MBA squad at all the other big pharmas start crunching those numbers! Yeeeehaww!

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17. Hap on August 7, 2008 4:36 PM writes...

I think it might be an open question whether they will get the same quality research done for the same price - some companies prefer to fire everyone because they know that even those who remain will not be happy and will probably not product at the same level (without any conscious sabotage, necessarily). This sounds like the Circuit City model of pharmaceutical research, which is likely to work only when there aren't really any alternatives (the big comps switch to the model and it becomes a choice between startups at higher risk and hours but maybe higher pay or CROs with lower pay but possibly higher security). The chemists with large career investment will probably stay but be unhappy, while shorter term people will change fields.

I wouldn't expect too many scientists from there to be showing up to encourage the munchkins to be chemists. This a a good idea if you don't expect to worry about pharmaceutical research in the US after the next 15 years or so.

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18. anon on August 7, 2008 6:31 PM writes...

"I think it might be an open question whether they will get the same quality research done for the same price"

They'll get 10 X better quality and 100 X better IP security than if they shipped it to a country beginning with "C". This shows Lilly is "less stupid" than GSK or Novartis.

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19. Anonymous on August 8, 2008 9:12 AM writes...

@ Skeptic:

Those were my thoughts exactly. You have to know salaries of current employees were discussed and calculated into this deal. My guess: if you were making $100k at Lilly, Covance will expect you to be overjoyed when they offer you $90k to keep your job (of course, there will be little or no bonus)

Lilly gets the same high quality work from known entities but at a reduced price and Covance gets a huge contract. Win win for upper mgmt. And only for upper mgmt. Of course, they will spin this as "hey, we'ere keeping the jobs here. What's the problem?"

I agree this is potentially a bigger story than the more recent GSK layoffs merely due to the precedent it sets.

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20. CMC guy on August 8, 2008 9:28 AM writes...

#19 anonymous not sure what you are thinking of in terms of precedent this sets as been happening to Manufacturing for sometime where Pharma will devest ownership of plants/people by selling to a CMO who will continue to make product(s) under contract for at least a certain period. I believe comments about cost cutting/shifting are true motivation although there usally are some eliminations (which starts based on salarys not expertise). Working for CRO/CMO is very different and was less stable however not sure any jobs in US are secure anymore.

That fact that it is Lilly making such a move is more surprizing as have long been very Research intense with mostly "in-house" emphasis (with exception like Icos and a few others).

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21. Former wonder Drugger on August 8, 2008 10:17 AM writes...

You know, we think these companies and corporate types don't have a heart. As a former worker at the Wonder Drug Factory where Derek also worked, I found out the following story. I'm sure it makes everyone feel much better - I wonder if it allows those attending the ceremony to sleep better at night:

On July 31, Dr. Wolfgang Plischke, Member of the Board of Management Bayer AG and past President of Bayer’s Pharmaceuticals division, joined Bayer employees and dignitaries from Yale, Orange and West Haven on the Oyster River Bridge at Bayer’s former West Haven campus for a special dedication ceremony honoring Bayer employee contributions to science, patients, and the community.

After an introduction by Sandy Oliver, VP, Public Policy and State Government Affairs, Dr, Plischke opened his remarks by welcoming employees and special guests including Bruce Alexander, Yale’s VP for New Haven State Affairs and Campus Development, Reinhard Franzen, President and CEO, BHCP, Paolo Pucci, CEO, ArQule Inc. and former President, BHC Pharma, Mayor John Picard, City of West Haven, and First Selectman, James Zeoli, Town of Orange.

“It is a great pleasure to be here today with all of you to celebrate the accomplishments of the many talented men and women from all over the globe who have worked at this wonderful campus,” said Plischke. “I had the privilege of working here several years and I have many fond memories of employees and of the local surrounding communities.

“Historically, the West Haven campus opened over 40 years ago as Dome Laboratories, a Division of Miles laboratory, with 250 employees. Throughout our 40-year history on this site, employees made many contributions to expanding our knowledge of science and developing medicines to improve the health of people worldwide.”

Plischke listed a few significant facts about the site:
Alka Seltzer was manufactured here
Cipro was manufactured and supplied to aid the US government during the anthrax outbreak
Nexavar ®, the first oral treatment for kidney cancer, was discovered in research laboratories here.

“These advances couldn’t have been made without the support of the vast infrastructure of talented individuals working collaboratively in the areas of research, manufacturing, distribution, product development, regulatory, legal, finance and others who dedicated themselves to their work to improve the lives of patients.

“I’m confident that this legacy of dedication and commitment will continue as we turn to a new chapter in the history of this site under the leadership of Yale--its new owners.”

Speaking on behalf of Yale, Bruce Alexander paid tribute to the many talented employees who have worked on campus.

“I’ve been a big admirer of Dr. Plischke and the Company,” said Alexander. “Today, I’d like to celebrate and acknowledge the many traditions Bayer brought to this campus including research to cure disease and improve the quality of life around the world and a legacy of community partnerships.”

“I’m proud that Yale will continue the great traditions Bayer began.”

Plischke and Alexander together unveiled a bridge plaque that reads:

From 1965-2007, this was the Bayer HealthCare
(formerly Miles Laboratories) campus.

During that time Bayer HealthCare employees

made important contributions to science

and to the health of individuals worldwide.

Orange’s First Selectman James Zeoli commented that it is “fitting that this bridge has brought us all together—symbolizing the ties between West Haven, Orange, Bayer and Yale.”

“We’re excited and honored that Yale chose this site and plans to carry on its traditions,” he said.

West Haven Mayor John Picard added his thanks to Yale for deciding to move to the site. He also acknowledged the “incredible relationship and friendship built with Bayer over the years.”

“You can tell a lot about the character of a company by what it does when no one is looking,” he said. “The good Bayer has done for the community speaks volumes.”

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22. Jose on August 8, 2008 12:25 PM writes...

Indy Star reports that salaries will be "similar."

And similar means, what -15% ?

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23. CMC guy on August 8, 2008 12:49 PM writes...

#22 Jose- that is better than "competitive" which in Biotech HR lingo usually means

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24. Anonymous BMS Researcher on August 8, 2008 3:42 PM writes...

Former wonder Drugger on August 8, 2008 10:17 AM wrote...

> 40 years ago as Dome Laboratories, a d
> division of Miles laboratory...

A friend who used to work there told me, shortly after Bayer took over Miles a longtime employee retired and was given a plaque "37 years of service to Bayer..." The guy snapped, "It was 37 years of service to MILES and three weeks of service to Bayer!"

I've been at the BMS Wallingford site for about 10 years myself; a couple of colleagues who were here with Bristol-Myers merged with Squibb in 1989 tell me they learned of the merger by arriving one morning to see a new sign at the entrance.

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25. anonymous on August 8, 2008 10:15 PM writes...

Re: Lilly-Covance deal. Those who are not staying with Lilly have received very nice packages; nice enough that some who have been retained by Lilly are a little envious.

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26. Petros on August 10, 2008 4:22 AM writes...

Re 21

I haven't seen the Dome name ina while. I am another exe-mployye, from the UK, but although Bayer had acquired Miles when I joined it was when our employment was transferred directly to the WDF owners that our salaries rose substantially.

And In Bridgend in Wales they had an Alkka Seltzer tabletting machine, made in the 1940s, and shipped to the UK when the US facility was updated!

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27. Johnson on August 10, 2008 1:12 PM writes...

This only proves we need to double the number of chemists in this country. It appears that the current crop of people think 100K is an acceptable base salary.

The new generation will come to see 50K with no bonuses or lavish benefits as the norm. What will follow is improvements in the number of companies and variety of positions. Workers will give up salary but gain flexibility in where they can work.

We'll see improvement in new drug developments and society will prosper. It's really a win-win situation for everyone.

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28. z on August 10, 2008 2:52 PM writes...

Johnson wrote: "This only proves we need to double the number of chemists in this country. It appears that the current crop of people think 100K is an acceptable base salary. The new generation will come to see 50K with no bonuses or lavish benefits as the norm. [etc.] It's really a win-win situation for everyone."

No, this is a lose-lose situation. People will stop going into chemistry altogether. Consider that a a Ph.D. w/ postdoc typically involves 6-7 years of 80 hour workweeks at less than minimum wage. Master's degree isn't quite as bad, but it is still an immense investment of time and lost-earnings for those years of training. Most chemists already think we are underpaid. If you start cutting salaries in half, nobody will do it. Drug development will cease.

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29. Luke on August 10, 2008 9:58 PM writes...

"People will stop going into chemistry altogether"

I somehow doubt China and India will stop training chemists. American chemists are overtrained.You need no more than 3 years for a good PhD. That's a US crazy situation based on imbalance between greedy academics and pragmatic business people. Borders don't exist anymore. Deal with it and get yourself an MBA!

As second option maybe baseball player or basketball.

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30. Don B on August 11, 2008 7:12 AM writes...

It is definetly a "lose-lose" situation for hemists & scientists in general.

The biggest loss will be to future generations of patients.

How many drugs have been discovered by "so called developing countries"? Please list!

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31. Don B on August 11, 2008 7:13 AM writes...

It is definetly a "lose-lose" situation for chemists & scientists in general.

The biggest loss will be to future generations of patients.

How many drugs have been discovered by "so called developing countries"? Please list!

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32. Milo on August 15, 2008 2:10 PM writes...

Re: 29,

Wait, you mean that the six years it took me to crawl through grad school was not really necessary? My advisor kept saying otherwise.... I think I was fooled...

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