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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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In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

In the Pipeline

« "Better Educated" in China? | Main | Golden Ages Are Where You Find Them »

May 26, 2010

Albany Molecular Cuts - In the US, Anyway

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Posted by Derek

From their press release:

". . .As part of its strategy to increase global competitiveness and remain diligent in managing its costs, the company is also implementing significant cost reduction activities at its operations in the US. . .AMRI is reducing its US workforce by approximately 10%, or an estimated 80 jobs. This includes currently open positions that the company is not filling at this time.. . .Further, the company is suspending operations at one of its research laboratory facilities in Rensselaer, New York. Employees and equipment will be consolidated into nearby AMRI locations.

. . .These actions reflect the focus by our customers on cost of services amid a highly competitive environment coming primarily from Asia. This has led to a continued shift in demand for AMRI's services from the US to lower cost resources in Asia and Europe. While we remain cautiously optimistic about a return in demand for contract research outsourcing by the biopharmaceutical industry, softness in the US market has extended beyond our expectations. . .

AMRI's whole reason for starting was to save other companies money on chemical services. Given that, it's no surprise that they've been feeling the pressure in recent years, and the economic conditions out there must really be cranking things up. I hope that they're right about a return in demand - but I'm not so sure that there's going to be much of a return in demand at the prices that they used to get.

Comments (12) + TrackBacks (0) | Category: Business and Markets


COMMENTS

1. RandDChemist on May 26, 2010 2:15 PM writes...

Not surprised.

AMRI is supposedly a sweatshop for chemists. When I started working, a friend was going to make the same as me starting as a Ph.D. I did not have a Ph.D.

This pay difference was a few years ago, but from what I've heard their poor pay structure has not changed.

In some ways, it is surprising that it did not happen sooner.

Permalink to Comment

2. NYSpursFan on May 26, 2010 2:20 PM writes...

New York is not exactly the cheapest place to do business, either. I agree with #1; I'm surprised this hasn't happened sooner. If anything, AMRI will likely do more of this in the future.

Permalink to Comment

3. David P on May 26, 2010 2:56 PM writes...

As Derek said, their raison d'etre is to provide cheap chemical services. Given they have invested in sites in Singapore, India and Hungary, it is really no surprise to see this. Interesting that they don't have a site in China though.

Permalink to Comment

4. FormerAMRI on May 26, 2010 3:58 PM writes...

RandDChemist, also take into account the fact that the cost of living is much lower in Syracuse or Albany, NY (where AMRI currently has research operations), than, say, in the Bay Area.

Permalink to Comment

5. crocowboy on May 26, 2010 5:08 PM writes...

How many jobs would have been saved if they had not taken over Excelsyn and taken on their approx 12.5 million gbp deficit

Permalink to Comment

6. Jose on May 26, 2010 6:35 PM writes...

Ahhh, those heady, halcyon days in the mid to late-90's when combi chem and domestic outsourcing was going to save the pharma industry.... who could have ever predicted the way things would turn out? :)

Permalink to Comment

7. Hap on May 27, 2010 8:13 AM writes...

It may be cheaper than the Bay Area, and real estate is probably cheaper than Boston, the NYC metropolitan area, and CA, but I don't think that anything's terribly cheap - and with NY's budget problems I have to assume that things will get even less cheap. Also, for the lack of job availability, it's even more expensive (though I think there are some pharma companies in Tarrytown, 2 h south).

Paying NY taxes for OH services probably sucks. Getting paid like an undergrad for being worked like the horse in Raskolnikov's dream in Crime and Punishment is not an attractive combination.

Permalink to Comment

8. RandChemist on May 27, 2010 8:36 AM writes...

#4

That did not explain this pay gap. Never have I seen pay this significant a pay level inequity accounted for by cost of living.

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9. Polyene on May 27, 2010 8:42 AM writes...

Rand, nice u had a Awesome job that payed 90k w/o a phd

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10. NH_chem on May 27, 2010 9:01 AM writes...

If AMRI continues to follow the advice of all the ex-General Electric people they have hired, they will have issues. They have lost a ton of good people over the past 3 years, many long timers. They left for various reasons but there is one thing in common- the company has lost its way.

Throw in the issues with the Hungarian company they bought to do FTE R&D (the Hungarians apparently just stop working if they don't like the chemistry and don't tell anyone.....) and with the inability to find good replacements and it looks rough for them.

Sad for the people who got the axe.

Permalink to Comment

11. RandDChemist on May 27, 2010 10:29 AM writes...

# 9

Uh no. These were starting salaries years ago. Mine was where it should have been. The other person? Not so much.

Permalink to Comment

12. A Nonny Mouse on May 27, 2010 11:51 AM writes...

#5

You could ask how many jobs could have been saved if Tom D'a wasn't paying himself 10% of the revenue from Allegra royalities (on top of his salary)? But then again, how many people would not have a job if he had decided to keep the lot rather than try to build the company up?

Interestingly with the Excelsyn purchase things have come full circle; AMRI took over the NutraSweet chemicals operation in Chicago, but all the IP stayed with the Great Lakes Holywell operation which was to become Excelsyn. AMRI closed down the Chicago operation but now has the other part of the old Great Lakes fine chemicals operation!

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