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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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February 1, 2012

AstraZeneca Layoffs and Closings

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Posted by Derek

Update: it's all true. 7,300 job cuts in total. Montreal and Soedertaelje (Sweden) to close. And AZ seems to be all but getting out of pain/CNS, cutting down to a few dozen people who will do external collaborations. Oh, and they're buying back 4.5 billion dollars worth of stock, instead of spending that money on what the company tries to make a profit on. So there is that. If you'd like to hear AZ tell you how all this is making them more productive, here's the press release.

I've been hearing reports, which I hope are incorrect but as yet have no reason to doubt, that the AstraZeneca site in Montreal is set to close as a result of this latest round of layoffs. The official announcement is coming in a few hours - I wanted to put up this post so that more details can be added in the comments as people get them.

This will be bad news for the Montreal research community, which has already been taking it pretty hard over the last few years. As that link shows, though, they least had a number of employers to start with, as opposed to some of the UK sites (and others) that had been R&D monocultures when their closures hit. But there's no way to really put a bright face on this stuff. . .

Comments (45) + TrackBacks (0) | Category: Business and Markets


COMMENTS

1. Anonymous on February 1, 2012 10:31 PM writes...

Confirmed closing at mid-year. Several former Merck Frosst people that went to AZ get hit again. Tough times for research in Montreal.

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2. Useless Molecule on February 1, 2012 10:39 PM writes...

So now the only major research site remaining in Montreal is Boehringer Ingelheim. Another one that will "most likely" close within 2-3 years.

BMS, gone
Whyeth/Pfizer, gone
Merck, gone
AZ, gone

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3. Anonymous on February 1, 2012 11:45 PM writes...

how munch money they can save by closing a site with only +100 employees?

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4. Anonymous on February 2, 2012 12:05 AM writes...

We were always told Montreal's site was cheap to operate. AZ is giving up on CNS. Probably more to come in few hours from now.

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5. PharmaHeretic on February 2, 2012 12:07 AM writes...

One day in the near future they might run out of employees to fire... I hope they have a plan for that day.

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6. johnnyboy on February 2, 2012 12:27 AM writes...

This is so depressing. Montreal used to look like a viably hub for biopharmaceutical research, but after the last ten years of buyouts and closures, pretty much all that's left is CROs.

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7. DrSnowboard on February 2, 2012 1:26 AM writes...

That is disappointing. Whenever I met people from the Montreal site they seemed switched on, entrepreneurial and motivated. Sadly that made them stand apart from the majority of the AZ monolith. I hope the Montreal site finds a way to regenerate and return.

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8. Pastor on February 2, 2012 4:43 AM writes...

...and there goes R&D in Södertälje, Sweden. Last year it was the site in Lund, in all nearly 2000 jobs either relocated (some personnel to the Mölndal site) or – mostly – out the proverbial window.

Sad day, indeed.

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9. Calvin on February 2, 2012 5:30 AM writes...

Dr Snowboard. Agreed. A good productive group.If I was being cynical I might suggest that AZ's most recent history would be of closing all the productive sites. But I'd just be bitter.

300 jobs to go at AP; Montreal and Sodertalje R&D to close. Exit Neuro and replace with a "virtual iMed" in Boston. AZ in a death spiral.

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10. Fred Klug on February 2, 2012 7:03 AM writes...

So what have they been researching there - how to market off-label use of their drugs? Or how to design a new mental disorder for their drugs?

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11. Terry on February 2, 2012 7:09 AM writes...

风景这边独好-毛泽东

it is time to go to China

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12. Useless Papers on February 2, 2012 8:02 AM writes...

Advice to every big pharma top-management: Keep laying off real scientists and keep allowing your sycophantic mid-management to write hundreds of useless papers/reviews/analysis on ClogP and solubility.

This is the path to profit, clearly.

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13. anonymous on February 2, 2012 8:09 AM writes...

What post like this would be complete without a comment from Terry - the pharma equivalent of Hanoi Hannah.

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14. bbooooooya on February 2, 2012 8:32 AM writes...

The buyback is an unkind touch.

While this is clearly sad news, maybe it's an example of what people seem to be saying, i.e. that big pharms are realizing they aren't good at discovering new drugs. It seems, as this example directly shows, that at least some of them are giving up the pretext of even trying anymore, and will just give $ back to shareholders instead.

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15. Industry Guy on February 2, 2012 8:35 AM writes...

Its funny how the only major pharma not listed on the stock market is the only one still remaining in Montreal. And a stock buy back for AZ to boot. Financiers are ruining the pharma industry with their short sightedness to make the quarter 4 times a year.

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16. MTK on February 2, 2012 8:42 AM writes...

@13,

Well, if you're into the whole reverse schadenfreude thing, you're in luck.

In five years those same jobs will be leaving China for India, Indonesia, or wherever, including maybe back to the US. Costs in China are rising dramatically as is the yuan relative to Western currencies.

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17. Anonymous on February 2, 2012 8:43 AM writes...

I thought precisely the same as bbooooooya - Reporting massive layoffs in the same breath as a buyback and decent quarterly profits stinks

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18. Evorich on February 2, 2012 8:44 AM writes...

Share buy backs plus R&D cuts = short-term shareholder bribery & sale of long-term future.

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19. bbooooooya on February 2, 2012 9:08 AM writes...

"Share buy backs plus R&D cuts = short-term shareholder bribery & sale of long-term future."

Yes. Apparently AZN mgt does not think it has a future as a pharma company and is acting accordingly. Presumably for admitting their failure to produce durable value execs will get really really big bonuses. Nice "work" if you can get it.....

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20. frank on February 2, 2012 9:45 AM writes...

as someone posted on another board, it's not all bad news...

"The Board Renumeration (they spelled it wrong!) Committee of AstraZeneca PLC has determined that the 2011 Global Perfomance Outcome will be 137% of target. This is based on performance against Core EPS and Cash Flow targets and overall business performance against our strategic priorities."

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21. Anonymous on February 2, 2012 10:34 AM writes...

AZ layoff package to contain Rosetta Stone Mandarin

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22. Moneyshot on February 2, 2012 10:36 AM writes...

BI Laval (Montreal) is the canary in the mine for the rest of the company

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23. Student on February 2, 2012 12:11 PM writes...

Why will you never see MDs getting laid off? They use certifications to control supply/demand and the issuer is an organization of MDs. Why can't chemists do this?

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24. lynn on February 2, 2012 12:40 PM writes...

#20 - frank,
Maybe they DO mean Runumeration. They certainly are working the numbers.

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25. Anonymous on February 2, 2012 12:43 PM writes...

#24. You never see MD's being hired on H1B work visas either. We need some kind of Chemical Society to watch out for our best interest.

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26. Ryad on February 2, 2012 1:29 PM writes...

Due to NAFTA you can expect all the chemists in that crowd to be heading to the US to compete for the large number of chemical positions that are constantly opening up here in the USA.

My God, according to the American Chemical Society, many thousands of positions open up here in the USA every year.

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27. Anonymous on February 2, 2012 2:05 PM writes...

What happened to the Waltham people?

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28. Portnoy on February 2, 2012 2:48 PM writes...

The best is that they call firing 7300 people: deliver ... benefit to the buisness.
The innovative (as it was called) creation of the virtual neuroscience iMed is so brilliant.
This makes Dilbert looking like a moron.
Health connects us all.

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29. Terry = Tool Extraordinaire on February 2, 2012 2:53 PM writes...

'Nuff said.

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30. PharMan on February 2, 2012 4:39 PM writes...

If share buy backs is the way to deliver business value then by all means let's do more of that! Let's stop making drugs and just work with buying back all shares, we'll make a fortune, right?
Shares Connects Us All

AZ is run by a bunch of morons who will conveniently move into other positions before the have to face the consequences of their actions. Those blithering lunatics have actually set a goal for the company to deliver 3 new NDA's per year by 2015. This when they, or anyone else in the industry, hasn't even managed 1 per year. And this without coming up with a plan on how this should be achieved, oh sorry, the plan they came up with was that costs has to be cut.

But I guess the Britt's have live up to that long tradition of f-n up empires by bad management.

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31. Sandwiched on February 2, 2012 4:54 PM writes...

Martin Mackay oversees merger of Wyeth and Pfizer then wields the axe, then moves to AZ and wields the axe and then????

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32. tedthechemist on February 2, 2012 5:38 PM writes...

30 - actually, AZ is being fucked up up a yank and a jock - and what an efficient job they are doing

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33. T. O. on February 2, 2012 5:54 PM writes...

It's all about value, values and valued:

Value = What shareholders get
Values = What the industry doesn't have
Valued = What chemists aren't

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34. Pheonix on February 2, 2012 6:09 PM writes...

#31. For anyone remembering the Australian test side of the 1950s and early 60s, I suggest from now on we call him Slasher Mackay...

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35. anonyMouse on February 2, 2012 6:11 PM writes...

Don't know anything about this one. Maybe you want to publicize the 31 Jan Genzyme job cuts? The Waltham site (where small molecules work is done) was apparently hit pretty hard.

Permalink to Comment

36. Yancey Ward on February 2, 2012 7:41 PM writes...

Moneyshot at #22,

Maybe. However, the Ridgefield, CT has undergone R&D cuts (me being one of them) already. I really don't know what the future of the Laval site is going to be, but they have to be nervous.

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37. Useless Molecule on February 2, 2012 8:14 PM writes...

@ 36

You are absolutely right, especially given the extremely poor record of productivity of the B.I. Laval site.

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38. S on February 2, 2012 10:47 PM writes...

So very sad. Sad for those folks losing their jobs and sad that pharmas have no idea what to do next other than buy their own stock because its so cheap..It may get even cheaper.

#26 mentions ACS, did anyone see the ACS blog on what it takes to be a chemistry Entrepreneur back in October 2011? And in particular watch the video http://cenblog.org/just-another-electron-pusher/2011/10/what-it-takes-to-be-a-chemistry-entrepreneur/ . Christine Herman kindly sent me this and like many folks I missed it's announcement. Seems like this sort of crept out and did not get much visibility? Could it be perhaps that while well meaning these kind of things result in reports that gather dust as pdfs tend to do, rather than actually resulting in new initiatives that give people opportunities and jobs.

I vote for the ACS giving back some of their funds to actually seed some new companies / technologies that might disrupt our stagnating pharma industry.

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39. Ed on February 3, 2012 1:25 AM writes...

#36/#37 - your Euro masters have been scouting CROs in the past few months. Just saying.

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40. Terry on February 3, 2012 5:10 AM writes...

Chemistry in north america- the end

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41. Jordan on February 3, 2012 10:05 AM writes...

The Montreal pharma companies were a (the?) major employer of PhD- and MSc-level chemists in Canada. The closure of these sites (Merck Frosst, now AZ, etc.) is brutal for the Canadian chemistry research community.

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42. poor lonesome chemist on February 5, 2012 10:07 AM writes...

I’d like to point out the “3Cs” philosophy implemented within AstraZeneca two years ago and comment on them.
“Courageous Leadership”: here comes the time to announce the big global reorganisation and the decisions associated. But for employees in Oncology it’s not settled yet and we will see in March. This does not really sound like taking decisions, assuming the choices and acting decisively. Oh, this latter makes me remember the third leadership capability (1-Passion for customer, 2-thinks strategically, 3-acts decisively, 4-drives performance, 5-works collaboratively, 6-develops people and organisation), which is another concept used within AstraZeneca to develop employees’ leadership. This is a good example of do-what-I-say stuff, not applicable for leaders.
“Collaboration”: effectively by cutting 7200 collaborators, collaboration will be much better in AstraZeneca. That leads me directly to the third “C”.
“Creativity”: Effectively, cutting 7200 jobs is a real innovative idea. Even my 7-year-old daughter could have worked it out: “you have 5 monkeys. Each of them holds a coconut, how can you get 3 coconuts? – By getting rid of the 3 monkeys!” And she hasn’t got a MBA yet.
Last but not least, Mene said while presenting the 2012 scorecard: “AstraZeneca will not reward efforts, only performance, achievements and good results”. Hum… effectively if the high productive site, Reims – France, gets closed, that would make sense.

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43. Anonymous on February 5, 2012 7:20 PM writes...

The Astrazeneca closure is no surprise after the Merck fiasco. The problem with Canadian big pharma research is that although it's cheaper, the reality is that it's viewed as an "outpost" by management...a small group doing good research at lower salaries (wrt their US counterparts) but the key word here is "small". That's the kiss of death. When the cuts come, relevance tends to prevail. Why have an outpost when we can consolidate activities to the big neighbor in the US? The bottom line problem is the big pharma in the US is also "on the block" (big time}. Size matters...but for how long???

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44. Anonymous on April 17, 2012 8:30 AM writes...

AstraZeneca australia just redundant production employees today

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45. Cyclohexadione on August 14, 2012 3:52 PM writes...

AstraZeneca is going to restart its operations soon. The whole site will get a serious Quebec tax-payer funded capital injection (Quebec has elections on Sept 4 2012, so the governing Liberals will want to show that they are countering the decline of Montreal's pharma sector), and the Astra spinoff NextMed will be created. NextMed scientists will of course be former AstraZeneca employees, yes the same ones that were not able to put a drug on the market for 18 long years. The site will be opening to (Chinese) CROs too (Santai labs for example) who will have the opportunity to work in a taxpayer funded facility. AstraZeneca doesn't seem to be interested in funding research in Montreal, but the government clearly has other plans. A winning strategy?

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