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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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April 26, 2011

AstraZeneca Tears 'Em Down

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Posted by Derek

Well, this takes things along another step - AstraZeneca has looked over its Wilmington-area site, which has a lot of empty space in it now, and decided that the best thing to do is: start tearing buildings down:

AstraZeneca will demolish 450,000 square feet of laboratory space in three buildings at its North American headquarters campus off Concord Pike in Fairfax as part of its global restructuring, the drug giant has confirmed.

The three buildings account for a major chunk of the company's Fairfax campus and house all of the company's Delaware-based research efforts. The huge complex west of Concord Pike is only about a decade old.

But as this article clarifies, the buildings that are coming down are generally 30 years old and more. In this climate, leasing them out to someone else is probably almost impossible, even if it were physically feasible. And it's not easy to turn a lab building into much of anything else. So what else to do? I hate to see this, but I can't come up with a better answer, either.

The first research site I worked at (Schering-Plough in Bloomfield, NJ) was torn down, after repeated attempts to find a buyer for it in the early 1990s. A Home Depot (and its parking lot) occupies the space now. That one was an even harder sell, with cramped and still older buildings, and in the end, the company couldn't even give the place away. But this is a sad thing to see, no matter what.

Comments (22) + TrackBacks (0) | Category: Business and Markets


COMMENTS

1. daveA on April 26, 2011 12:27 PM writes...

This is pretty typical AZ. They "considered many many options". In my experience they are unable to consider multiple options at the same time and so closing a building whilst trying to lease it to somebody else is far too complicated. In the same way when they recently closed my part of AZ they were unwilling to support a bio-incubator even though it would have saved them money on lease costs. Too complicated for them when they could just write a cheque and make it disappear. The Charnwood site is almost certainly in for the same fate. None(!) of the sites that AZ have been closed have survived as science sites (with the exception of Kudos in Cambridge which is now with Dr Reddys). AZ are sufficiently doomed as an organisation and incompetently led that this type of approach makes sense to them.

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2. Frank Adrian on April 26, 2011 1:14 PM writes...

When you say "In this climate, leasing them out to someone else is probably almost impossible, even if it were physically feasible. And it's not easy to turn a lab building into much of anything else.", you are spot on. The bottom line is that Fairfax is prime beltway territory, better used for lobbying, consulting, and law offices than chemistry. Given that the increase in land value over thirty years probably dwarfs the increase of value in the buildings over the time, the only question I'd have is if the additional value you'd get from selling the land as a cleared ready-to-build site pays for the demolition.

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3. Mark on April 26, 2011 2:14 PM writes...

To give you an idea of the size, Pfizer's Ann Arbor site was 2.3 million sq ft total, including all office space and pilot plant.

Mark

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4. RD on April 26, 2011 2:46 PM writes...

This is just stupid.

Hey! Why doesn't the government lease them for startup biotechs? Or why don't we move to Michigan? If pharma was *really* interested in saving money, it wouldn't have concentrated all of its research in the crowded, super expensive northeast. They have this newfangled thingy called the Internet now. Besides, it's not like all of the companies in Cambridge are pow-wowing and collaborating. Not if the lawyers have anything to do with it.

Hey, Cambridge might be a nice place to Work but I wouldn't want to live there.

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5. You're Pfizered on April 26, 2011 3:08 PM writes...

It's about money, mostly. Taxes, I'd guess.

My company tore down a couple of newer buildings (less than 10 years old) a few years ago that had been vacated because it was more cost-effective from a tax standpoint not to have the occupiable space.

I'd also guess that being part of a larger campus, it might be difficult to securely cordon off these buildings from the rest of the site in order to lease them. That's a guess, I'm unfamiliar with that site...

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6. SP on April 26, 2011 3:21 PM writes...

"Cambridge might be a nice place to Work but I wouldn't want to live there."
Why is that? Cambridge actually still has money to keep up their infrastructure, low property taxes, short commute, one of only ~20 cities in the US that still has a AAA bond rating.

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7. RD on April 26, 2011 4:55 PM writes...

SP: some of my colleagues were asked to relocate there. They can't afford to live in Cambridge. They have to live in the burbs and commute in. They also weren't offered a cost of living adjustment. Some were offered jobs there and then declined them.
Compared to where they came from, the commute is longer and the housing is expensive.

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8. Anonymous BMS Researcher on April 26, 2011 5:45 PM writes...

In a previous career, before getting my doctorate in biology, I was an electrical engineer. Three factories where I once worked got torn down long ago. Two of them I think are now retail, I'm not sure what the third site is today.

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9. Anonymous on April 26, 2011 6:03 PM writes...

Roche should sell / bulldoze that nutley NJ eyesore and turn it into a strip mall. After all, they are leasing out space on the campus to local universities etc. Hummm...can't make ends meet and pay the bills???? They decrease the headcount on that site by 38% and still decide to keep it open?? The days are numbered my friends....look across route 3 (on the westbound side) and what do you see...new retail / restaurants popping up. The eastbound side leads to Gotham City and I'm sure there's a great unmet need for new stores etc....much more need than for Roche

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10. gippgig on April 26, 2011 10:21 PM writes...

How about converting one of these surplus labs to a chemistry museum?

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11. A Nonny Mouse on April 27, 2011 3:05 AM writes...

A senior A-Z person in the UK (who deals with external liasons) has indicated that the Charnwood site is to be taken over by Nottingham University and used for the training of Chinese CROs (by way of their Chinese campus).

I realise that education in the UK is a big export earner, by training them to take more jobs?????

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12. AlchemistOrganique on April 27, 2011 7:49 AM writes...

I agree with some of the sentiments above...this demolition at AZ-Delaware is a tremendous waste of resources. This decision is a financial cop-out. Couldn't the AZ financiers devise some way of promoting non-for-profit biotech research at the scuttled site in order to get tax incentives?

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13. drug_hunter on April 27, 2011 7:55 AM writes...

Definitely, Cambridge isn't for everyone. For example, people who are narrow-minded don't do well there. Nor do people who find the idea of being surrounded by hundreds of world-class academic labs with which to collaborate unappealing.

The biggest downside of Cambridge IMHO is the lack of great Indian food.

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14. Hap on April 27, 2011 9:08 AM writes...

I liked going to school there, but the cost of living is significantly higher than most of the US, even if you have to live in the suburbs (both food and rent are significantly higher, so with no cost-of-living-adjustment, you're going to take a bath). Property taxes can be lower, but because the value of the properties are high, it's not an unmitigated win (if you're moving from somewhere else, the crappy housing market probably helps, unless you get laid off soon after moving). Unless you live in the suburbs, parking is a nonstarter (though you don't need it lots of places). Overall, it seems like it would be a difficult financial and tactical adjustment for someone with a family.

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15. RD on April 27, 2011 10:53 AM writes...

drug_hunter: ahhh, spoken like a true Cambridge-ite. I've known quite a few of your type.
Legends in your own minds.

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16. John on April 27, 2011 11:02 AM writes...

The Fairfax site has an interesting history. Prior to AZ was Zeneca, which took over the campus from ICI (Imperial Chemcials)from which it was spun off. ICI moved in on aquiring its former occupant, Atlas Powder Co. (yes, gunpowder), which was spun off from Dupont in the 50's when the government broke up Dupont's monopoly in the powder business.

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17. Hap on April 27, 2011 12:05 PM writes...

All those startups might indicate that a proportion of Cambridge-ites are legends in more than just their own minds. The only way pharma seems to spawn startups now is either in other countries or when their facilities go kaput and states try to move incubators in to keep some of the jobs there.

Sometimes, ego is justified (if not entirely pleasant for others to endure).

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18. drug_hunter on April 27, 2011 5:50 PM writes...

Is no one going to defend the Indian restaurants in Cambridge? So sad...

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19. Derek Lowe on April 27, 2011 7:51 PM writes...

Well, over in East Cambridge, Desi Dhaba and Punjabi Dhaba seem to do pretty well for themselves. And while neither Shalimar nor Royal Bengal are gourmet experiences, they won't poison you, either. Kebab Factory gets really good reviews, but I've never been. Ditto for Tamarind Bay. If you're a South Indian fan, there's Dosa Factory over by Central Square, but I haven't tried them, either. All those hours at work, y'know.

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20. Anon on April 27, 2011 8:34 PM writes...

Intresting story. From the map it is apparent that they are demolising all of the lab space in the research building - and keeping the "office wing" of the building. The labs are not all 30 years old: in fact, many of the labs in the 30-year-old part of the building were completely rebuilt in the past couple of years, and an HTS building and an animal facility were both added about 5 years ago. Still, it is no surprise that the labs on the site are being torn down.

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21. Anthony on April 27, 2011 10:28 PM writes...

@John - that would explain why the cross street through the campus is "Powder Mill Road". I wonder if they've got enough leftover product to do the demolition?

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22. Anonymous on April 28, 2011 5:07 AM writes...

And in related news, 5 years after closing Terlings Park in the UK, and having spent 5 years trying to sell the facility off, Merck have finally given up and the site will be demolished and a housing estate built in it's place.

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