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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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June 30, 2011

Pfizer Reverses Course in Sandwich - A Bit

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Posted by Derek

Pfizer now says that it's not going to completely close the Sandwich research site in the UK. 350 people will remain - which isn't too many compared to the fully staffed number (well over 2,000), but a lot better than zero. Between that and the attempt to make the site an enterprise zone, perhaps something can be salvaged. But the local economy is, as you'd expect, feeling the effects.

It's too early to say if this is an example of a drug company that feels as if it's outsourced enough and can stop now - let's watch the news over the next few months and see. . .

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


COMMENTS

1. Anonymous on June 30, 2011 3:16 PM writes...

Outsourced enough?? Er, No. They just couldn't find anyone who would 1) do the work at the site 2) could do it elsewhere without really affecting the timelines of some late stage projects. In the end, they had to keep this part open but only until these projects have stopped or moved on. This is a stay of execution - no more

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2. Mark on June 30, 2011 4:51 PM writes...

#1 has it right. I've been through the Pfizer grinder before. Likely what happened was that a high-level decision was made to kill the site. Then, when the news trickled down the org chart, somebody realized that some important program (likely from a re-prioritize portfolio exercise) would be held up because whatever needed to be done couldn't be done if Sandwich was closed.

Hence, they decided to keep a unit or two active at the Sandwich site. My guess is, that unless they fill the site with other companies (and take the property off Pfizer's books), those remaining 350 employees don't have much of a future.

Mark

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3. Anonymous on June 30, 2011 5:21 PM writes...

Mark, I'd be amazed if they manage to find any companies willing to move in. Pfizer Sandwich must be hugely expensive to run and is certainly poorly located. And the sheer size of the place means they'd probably need dozens of companies to make it work. In the current climate...?

At least a few jobs are spared for now I guess. But that's undoubtedly more to do with Pfizer management's incompetance than anything else. How sad

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4. Mark on June 30, 2011 5:31 PM writes...

#3, I agree. I don't see the Sandwich site having a fate much different than the Ann Arbor site. Pfizer tried for a couple years to sell the site but failed. It ended up going to the University of Michigan for pennies on the dollar.

The problem with the Sandwich site is location. It's in a rural area with not a lot of other tech-based industries around. Maybe if the UK gov't decide to purchase the site, provide start-up capital and tax benefits they could make a go of it. The problem with that is that creating a "biotech hub" is a multi-year process before it becomes self-sustaining. I just don't see that happening in the current economic climate. (Plus they pay scientists quite poorly in the UK compared to the rest of Europe).

Mark

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5. startup on June 30, 2011 5:32 PM writes...

I thought Pfizer said they plan to "save" another billion next year?

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6. Anonymous on June 30, 2011 5:39 PM writes...

The government won't buy the site - they're not interested (and let's face it, hardly flush with cash themselves at the moment!). Even if they did, why would a company want to locate in Sandwich when they could go to a purpose built site in Cambridge or Oxford? Even the new technology park on the GSK site in Stevenage will be much more attractive a location when it's built (and that's saying something for those of you who've ever been to Stevenage!).

Nah, Pfizer Sandwich is a goner.

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7. Anonymous on June 30, 2011 5:47 PM writes...

Does anyone know what's happening with the Novartis site in Sussex? Didn't they announce they were closing that a while ago?

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8. About Chemistry on June 30, 2011 6:45 PM writes...

Gotta love this quote from the last link:

“We had 111 employers at a job fair,” says Barbara Beacon of DBM, the consultancy involved. “The spirit has been buoyant. They are highly qualified individuals. Some are interested in teaching and one lady has completed a plumber’s course.

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9. non-pharma chemist on June 30, 2011 7:01 PM writes...

#4 - "(Plus they pay scientists quite poorly in the UK compared to the rest of Europe)." Wait what? I thought that it was UK and Switzerland that had decent science salaries and everywhere else in Europe was awful. Now you tell us it's only Switzerland?

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10. CRO Cowboy on July 1, 2011 12:32 AM writes...

From The FT.

http://www.ft.com/cms/s/0/c9578c84-a28a-11e0-9760-00144feabdc0.html#axzz1Qk6Ksb2i


June 29, 2011 10:29 pm
Hope of Chinese tonic for UK drugs
industry
By Andrew Jack in London
The Medical Research Council is in advanced talks with Chinese authorities to
attract up to £500m in investment to the UK over the next five years in an
innovative partnership that could save 850 scientific jobs.
Discussions centre on a new drug development company that would salvage
employment at British pharmaceutical research facilities earmarked for closure.

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11. Ed on July 1, 2011 12:33 AM writes...

#9 - Germany and Switzerland both pay much much better than the UK for PhD positions. Not sure about bachelors/masters levels, as these are normally filled by non-degree qualified folk in these countries.

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12. stuff on July 1, 2011 9:07 AM writes...

Hearing that when VCs looked at what Pfizer was offering to spin out it was mostly junk.

Also hear that a company in Scotland had 400 positions available to Pfizer employees and got very little uptake. Guess people won't move 500 miles for a job.

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13. Ch.E. on July 1, 2011 11:45 AM writes...

#8: "...and one lady had completed a plumber's course."

You mean chemical engineering? :-)

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14. pc on July 1, 2011 12:13 PM writes...

What would happen IMHO is 20 years down the road Chinese pharma will set up sites in North America and maybe Europe to get close to the markets here. For those of you whose kids now in k-12 but going for science the next generation will be ready to work for these companies when that happens. What goes around comes around I guess ...

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15. Cynical2 on July 1, 2011 11:04 PM writes...

Just remember to learn Mandarin

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16. Ed on July 2, 2011 6:29 AM writes...

#12 Hearing that when VCs looked at what Pfizer was offering to spin out it was mostly junk.

Well given the track record of VC firms in the UK I wouldn't pay much attention to what they think. How many real, 10-bagger winners have they backed in the past 10 years? Two or three?

And how many complete and utter dogs? [Here's looking at you Alizyme, Antisoma, Renovo, Summit, Cyclacel, Vernalis, BB, Ark, Ardana, Arrow, Phytopharm, Oxford Biomedica, GW Pharma, Sareum]

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17. DrSnowboard on July 2, 2011 3:03 PM writes...

Arrow? On the basis that AZ shut them? Hardly a gold standard in decision making there..

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18. Terry Liu on July 2, 2011 11:53 PM writes...

I am a Chinese scientist. First of all, it seems a good news in such a bad time. However, it is not the sign of changing the situation of pharmaceutical industry. Outsourcing is the destiny of 21 century’s pharmaceutical industry. End of the world? I guess lots of scientists already have been prepared for the coming layoff. I know several of my friends, they worked in the pharmaceutical industry, started their own business such as small store, gardening.
Since the coming to US for overseas study, these PHD students, smart or not, being slaved or not, already into a road with unseen results. After 5-6years hard working on some most asshole projects in some slave-master’s lab, these students, happy or not, were pushed out the lab for searching for a job, a job ? instead, maybe it is more appropriate to call it to find another master – post doc master. By and by, these students grow and need to support their family. So they probably know the situation is not good for them, finally they learned how to handle such bad situation, a part time job.
I guess nowadays it is wise for every single scientist to learn how to run a small business part-time.

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19. Ed on July 3, 2011 7:48 AM writes...

Well Arrow is/was a success, so long as you ignore the fact that both AZD2836 and AZD7295 have been binned by AZ. Doesn't seem to be anything else in the AZ pipeline that could have come from Arrow.

That aside my point was directed more to the financial return achieved by VCs - in this case a buyout by AZ at $150m might represent an okay return for the investors, given that their series B was $35m (4 years earlier). In this case they got lucky that AZ were willing to pay a solid premium to buy the assets, which have since been found to be severely lacking, and without which they would probably have been nursing another big loss.

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20. DrSnowboard on July 3, 2011 11:30 AM writes...

Exactly, an "okay return for the investors" in that climate was hardly a dog, though agreed not a 10x plus that may have seen in the past. What was the return on Kudos?

Drug discovery is a risky business, ask AZ if Medimmune was worth it.

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21. Petros on July 5, 2011 7:06 AM writes...

Let's see how these dogs fared

Alizyme drug to PIII but ran out of cash
Antisoma last rites time
Renovo struggling science but still lots of cash ($60 m)
Cyclacel not looking good
Vernalis (reverse takeover for $80m by a cash rich BB)
BB became Vernalis, still has value, some products and a pipeline
Phytopharm going concern, cash rich
GW Pharma markets a drug product and has a pipeline
Summit running out of cash
Arrow bought by AZ for $150m
Ark refocused but cash problems
Ardana short lived, always had problems?
Oxford Biomedica problems?
Sareum needs cash

So mixed bag but no major success since the BB hype days

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22. CR on July 5, 2011 2:43 PM writes...

@3, Anonymous:
"At least a few jobs are spared for now I guess. But that's undoubtedly more to do with Pfizer management's incompetance than anything else. How sad"

First, it's due to Pfizer's incompetent management that all of these jobs are lost; now jobs are spared because of Pfizer's incompetent management?

Are you people never happy?!?

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