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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: derekb.lowe@gmail.com Twitter: Dereklowe

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November 3, 2009

J&J Raises the Ax

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Posted by Derek

Johnson & Johnson says that it could be cutting up to 8,000 jobs. This has been in the wind for a while, but I haven't had any reports yet of what it's doing on the ground to the research sites. Any news from the readers affected, or is that yet to come?

Comments (25) + TrackBacks (0) | Category: Business and Markets


COMMENTS

1. Art on November 3, 2009 11:35 AM writes...

J&J's drug discovery was hit hard with layoffs today involving researchers in Raritan (NJ), Spring House (PA), and Beerse (Belgium).

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2. biotech_rules on November 3, 2009 11:38 AM writes...

What about La jolla site? Any news there?

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3. Art on November 3, 2009 11:41 AM writes...

Those of us on the East Coast have not yet heard what might happen (or might have already happened) to our West Coast colleages in La Jolla.

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4. You're Pfizered on November 3, 2009 11:53 AM writes...

This coupled with Novartis' announcement about their $1B investment in Chinese R&D makes it another rough day for US Pharma employees.

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5. Greg Hlatky on November 3, 2009 11:55 AM writes...

The MBA's must make their human sacrifices so that the bonuses will rain down on them.

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6. Anonymous on November 3, 2009 12:04 PM writes...

JnJ subsidiary, TransForm Pharma in Lexington, MA is toast.

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7. Lucifer on November 3, 2009 12:04 PM writes...

Greg,

But shareholders and bondholders must benefit from the great global ponzi scheme.

Societies that promote sociopaths to make short term gains do pay the price.

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8. Hap on November 3, 2009 12:18 PM writes...

I guess there'll be the slightly amusing comfort in about fifty years of seeing the Chinese and Indian pharmaceutical giants outsourcing their production and discovery to South Africa, Estonia, and Poland. If any of us are alive to see it. I'm sure the PR notices will be as enlightening and forthright, as well.

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9. Anon on November 3, 2009 1:25 PM writes...

Merck & Co., Inc. (NYSE: MRK) and Schering-Plough Corporation (NYSE: SGP) today announced that they will complete their merger shortly after 4:00PM ET today. The companies will begin combined operations tomorrow, November 4, 2009.

http://newsticker.welt.de/?module=smarthouse&id=961702

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10. Bob on November 3, 2009 1:40 PM writes...

10% across the board in discovery in Belgium. Bigger cuts in development.

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11. perplexed on November 3, 2009 3:35 PM writes...

Why did this happen? J&J not doing well?

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12. Anonymous on November 3, 2009 4:15 PM writes...

All Employees Scientist Level and below are laid off at JNJ(SH) and some selected higher ups. No BS/MS Chemists left there.

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13. You're Pfizered on November 3, 2009 4:24 PM writes...

12- I guess you don't need folks to make compounds if ChemPartner and WuXi, CRO du jour can do it for you. Number-wise, how many folks lost their jobs at that level?

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14. anon on November 3, 2009 5:50 PM writes...

OK, I don't mean to be picky, but shouldn't it be lowers the ax?

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15. DxDv on November 3, 2009 6:23 PM writes...

12,
I heard Dev is waiting for the anouncement tomorrow.

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16. Anonymous on November 3, 2009 6:32 PM writes...

It's not just the US. The future of Janssen in Belgium is now unclear after a series of lay-offs year after year, and Tibotec is toast too. Being able to produce at lower cost than India -- yes, they can -- doesn't seem to help much.

As for what triggers the need for a "reorganization", a long list of external causes is supplied by management, but it would probably be more accurate to say that the previous reorganization(s) is/are the cause... J&J is a company in permanent reorganization, I have always known it that way. And surprise surprise, that doesn't seem to contribute much to people's motivation or efficiency.

Although of course improved efficiency and/or cost savings are always cited as the reason to reorganize once more. In theory there is a faint possibility that that might be true, in practice there isn't enough time between reorganizations to get things running properly again.

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17. temp on November 3, 2009 9:56 PM writes...

#13: ~40 discovery chemists were laid off from Spring House, PA today, out of ~100 total. ~90% of the layoffs were BS/MS or PhD earned while in industry

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18. Jose on November 3, 2009 10:07 PM writes...

> ~90% of the layoffs were BS/MS or PhD earned while in industry

Let the great overseas outsourcing debacle continue unabated: who needs people working at the bench in the US? You just need more outsourcing liaisons!

Hang on to your hats, kiddies. This strategic gamble is gonna make the combi chem lost decade look like child's play.... good luck to everyone at J&J, SP and Wyeth.

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19. anon on November 4, 2009 12:51 AM writes...

"I guess there'll be the slightly amusing comfort in about fifty years of seeing the Chinese and Indian pharmaceutical giants outsourcing their production and discovery to South Africa, Estonia, and Poland."

Yea, just about he time the Chinese are getting good at research...

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20. Jose on November 4, 2009 5:16 AM writes...

Nice paper here, but the section where they actually report in silico toxicology predictions has to be one of the silliest things I have seen in print for quite a while:

http://www.plosntds.org/article/info:doi/10.1371/journal.pntd.0000540

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21. Bob on November 4, 2009 2:05 PM writes...

@16 - Tibotec isn't toast, J&J are simply not renewing the lease on the buildings and are consolidating into open space at the main Beerse site.

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22. mts on November 9, 2009 2:12 PM writes...

I really do sympathize with anyone losing his/her job in what has been a massive, multi-year restructuring of the industry. Having said that, hasn't the dearth of new drugs in the industry proven that the old ways of looking at things isn't working. The tone of the comments here (and elsewhere) seems heavy on complaining that the companies just care about money....but are the companies really shutting down labs that are productive? I'm not sure; I'm an outsider. But it seems that if you are producing lots of great new drugs, you'll be fine. If you're not, then what's the point? Really not meaning to sound confrontational, but just trying to understand more about the dynamics. Are these companies really shutting productive research units? if so, they are crazy.

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23. mts on November 9, 2009 2:13 PM writes...

I really do sympathize with anyone losing his/her job in what has been a massive, multi-year restructuring of the industry. Having said that, hasn't the dearth of new drugs in the industry proven that the old ways of looking at things isn't working. The tone of the comments here (and elsewhere) seems heavy on complaining that the companies just care about money....but are the companies really shutting down labs that are productive? I'm not sure; I'm an outsider. But it seems that if you are producing lots of great new drugs, you'll be fine. If you're not, then what's the point? Really not meaning to sound confrontational, but just trying to understand more about the dynamics. Are these companies really shutting productive research units? if so, they are crazy.

Permalink to Comment

24. mts on November 9, 2009 2:14 PM writes...

I really do sympathize with anyone losing his/her job in what has been a massive, multi-year restructuring of the industry. Having said that, hasn't the dearth of new drugs in the industry proven that the old ways of looking at things isn't working. The tone of the comments here (and elsewhere) seems heavy on complaining that the companies just care about money....but are the companies really shutting down labs that are productive? I'm not sure; I'm an outsider. But it seems that if you are producing lots of great new drugs, you'll be fine. If you're not, then what's the point? Really not meaning to sound confrontational, but just trying to understand more about the dynamics. Are these companies really shutting productive research units? if so, they are crazy.

Permalink to Comment

25. That Guy Again? on November 10, 2009 10:53 PM writes...

@21-24: The interesting thing is that the Big Pharma Overlords are saying that they trust the VC community to be better at drug development than the Overlords themselves. This implies that the folks running Big Pharma as a class don't understand science and don't understand how to attract and retain top caliber scientific talent. Having admitted their shortcomings to themselves, the Overlords are now outsourcing that function (R&D Management) and paying a venture premium (50% IRR) for it.

Sad.

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