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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 12, 2013

Pfizer Slowly Shrinks in Groton

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Posted by Derek

Here's the story, from Lee Howard of The Day, who's covered the company for years.

Pfizer had 4,500 employees - mostly scientists - at its Groton and New London campuses two years ago, when the New York-based company announced a major downsizing that would cut the local workforce to slightly less than 3,400. By June of last year, Pfizer reported that reductions were well under way, with about 3,700 employees remaining on the Groton campus.

Pfizer's response to a request last week for an update on the local jobs number initially indicated there were now slightly fewer than 3,150 Pfizer employees at the company's consolidated site in Groton - 250 fewer than had been anticipated when the local downsizing was announced. The company later amended the number, however, saying the initial report had neglected to count some personnel, and Pfizer gave a new census of about 3,300 employees, only a hundred less than what had been projected.

There were as many as 6,000 employees at one point, but it's been a long and bouncy ride since those days. The article says that Pfizer has been trying to find buyers for a number of vacant buildings (with, in this market and in that region, little success). Part of the Groton reduction is the move of the drug discovery people up to Cambridge. I go past the new building, still in construction, fairly often - it's right down the street from a gigantic hole in the ground that will be an expansion of the Novartis site. All of this construction recalls Levi Strauss getting rich during the California gold rush - not by doing anything so chancy as panning for gold, but by selling trousers to those who did. I've been in Cambridge for over five years now, and I have never yet traveled across it without going past some sort of academic/scientific construction site.

Comments (38) + TrackBacks (0) | Category: Business and Markets


COMMENTS

1. Anonymous on February 12, 2013 9:46 AM writes...

There was a great picture floating around Kalamazoo during my tenure there a few years ago that I think is still pretty apt.

Someone just so happened to get a well-timed photograph of a Pfizer banner attached to a light-post that claimed "We love our neighbors!" as a wrecking ball smashed in to a newly renovated building from the year prior right behind it.

The cycle continues...

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2. Hap on February 12, 2013 10:15 AM writes...

I keep waiting for creative destruction in pharma to actually create something other than unemployment, paydays for upper management, and sketchy financial instruments. I'm glad I can't hold my breath for very long.

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3. johnnyboy on February 12, 2013 11:14 AM writes...

I left Pfizer at just the right time, it now seems. Their multiple site closures and moving into Cambridge seems to be nothing more than rearranging deck chairs on the Titanic, on a massive scale. For an industry that prides itself on supposed innovation, Big Pharma insisting on moving to Cambridge seems to me a lot more like conformist herd groupthink.

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4. anonymous on February 12, 2013 11:27 AM writes...

Based on the title of the post, a number of Viagra related jokes come to mind.

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5. NoDrugsNoJobs on February 12, 2013 12:02 PM writes...

Maybe they are making headspace count availability in preparation for their next meal - acquisition. Its been a while since they consumed Wyeth and I assume they are looking for their next "partner" to invite over to dinner.

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6. Kazoo Chemist on February 12, 2013 12:43 PM writes...

I have the infamous wrecking ball photo. There are actually two banners in the shot. One reads "The science of being a good neighbor". The other is "We love where we live". The picture doesn't actually show a wrecking ball smashing into the building, but it does show two backhoes ripping down what used the be one of the main lab buildings.

I would admit to being the photographer, but they might find a way to take my pension away! So.... "what picture??? I don't know nothin' about no stinkin' picture".

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7. Chemjobber on February 12, 2013 12:52 PM writes...

The picture (thanks, #6KC for search terms) is linked in my handle.

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8. Anonymous on February 12, 2013 1:14 PM writes...

@6: My apologies for the incorrect description. It was some years ago. The picture linked by @7 is actually worse than I remember.

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9. Kazoo Chemist on February 12, 2013 1:19 PM writes...

That picture is different from the one I have. I guess many were inspired to capture the juxtiposition of the sentiments and the carnage.

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10. A Non-Mousse on February 12, 2013 1:40 PM writes...

The wrecking ball picture sounds apt, except that the wrecking ball is supposed to be wielded by Pfizer. And the newly renovated building is supposed to represent the sum collective of other pharmaceutical companies that Pfizer has decimated and will continue to decimate. Can't wait for the asteroid that will wipe this dinosaur out (I am talking about the MBAs of course, I have nothing but sympathy for the scientists).

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11. Anonymous on February 12, 2013 2:23 PM writes...

Shouldn't the title be "Pfizer Slowly Sinks in Groton" Derek?!

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12. 'Nothermaus on February 12, 2013 2:31 PM writes...

@4 and 11: Perhaps the word "flaccid" is what you had in mind?

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13. mad dog on February 12, 2013 4:10 PM writes...

@6 is that the former bldg 267, across from which bldg 300 was constructed?

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14. mad dog on February 12, 2013 4:16 PM writes...


Just out of curiousity, has anybody ever plotted the correlation between the number of pharma companies / pharma employees vs the number of MBAs working in pharma. I would bet there is a strong inverse relationship with a pretty big r-squared. Any MBA readers out there want to volunteer? Who knows, you miahgt be able to turn it into our own business oportunity where pharma can outsource the MBA responsibilites.

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15. Anonymous on February 12, 2013 4:23 PM writes...

@13 I don't believe so. Building 267 is still across from 300 but it is now licensed out to MPI...or was supposed to be, but I don't know if they ever actually moved in to it.

The building being destroyed was one of the proxy ones next to 267. It might be building 126? One of them was taken over by the hospital but I can't remember which.

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16. Anonymous on February 12, 2013 4:42 PM writes...

The Levi analogy seems apt. I get why politicians/property developers etc love the biotech hub idea. It is even good for scientists who want to jump from company to company without moving home. But where are the medicines???

How many medicines have been discovered in Cambridge. I can name Velcade - any others????

I am seriously interested. I'm thinking Cambridge combined has the worst ROI on the planet yet all the big Pharma are shutting other sites to increase investment there. I don't have an MBA so perhaps someone could enlighten this PhD.

Thanks

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17. Kazoo Chemist on February 12, 2013 5:06 PM writes...

@13 No, they pulled down many of the buildings on the site. The one in the picture is Building 209. That housed most of the medicinal chemists on the 6th and 7th floors.

Building 267 was spared. They had to graft a new end on it. @15 is correct (in part) that this initially went to MPI. Their planned expansion did not occur. The building finally entered into the hands of Western Michigan University. It will house their soon to be inaugurated medical school.

Building 300 now houses the spin off animal health business. The only other buildings that remain are Building 126 and 24. 126 is a three story building that was completely renovated in the final years. The bottom two floors housed the Research Compound Collection and broad screening operations. State of the art robotic sample handling facilities. We had completely renovated the third floor for Medicinal Chemistry about 8 or 9 months before the site was shut down. Gutted to the steel beams and terrazzo floors and outfitted for almost 60 chemists. An absolute fortune was spent on this renovation and I don't have a clue what if anything is being done with the space today. Building 24 was the original corporate headquarters and later the lair of senior research management. It was saved for its historical value and is now owned by Bronson Hospital and used as office space.

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18. David Formerly Known as a Chemist on February 12, 2013 5:35 PM writes...

@16...it doesn't take an MBA to figure out why this industry prospers in hubs. Biotech is a very high risk industry. In most cases a biotech company will eventually cease to exist (not every case, but most). If the company fails to generate a product before running out of cash, the company disappears. If the company is successful in developing a product (or getting one to Ph3), there's a very high likelihood it will be acquired by a bigger company. In this latter example, from the perspective of the now unemployed scientist, the company disappears.

If one wishes to work in biotech one should move to one of the hubs early in their career. Yes, you will probably change companies every 3-4 years, but at least there's local opportunity to choose from. For the poor scientist in the midwest (think Searle, Upjohn, MarionMerrellDow, P&G Pharma, 3M Pharma, etc), you may as well live on an island in the south pacific when your company goes belly up.

So, when companies set up shop in hubs (like Cambridge) you'll be able to attract a much wider talent pool. There's a local culture and network that caters to the industry (ever heard of biotech Tuesday?). There's an entire support system of local service companies (IT, used lab equipment, hazardous waste disposal, etc) that understand your industry and your needs. VCs understand all these advantages, why do you think they often encourage their portfolio companies to locate (or relocate) their operations to one of these hubs?

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19. Anonymous on February 12, 2013 6:22 PM writes...

@14, you are giving the MBA degree too much credit. I am quite certain my MBA program didn't teach me anything useful. I have always considered research funding as largess of the funder. Don't tell me you've never come across chemists who goes into the lab just for the paycheck.

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20. Zardoz on February 12, 2013 6:55 PM writes...


My, My some real-speak from a major outlet on how immigration is hurting the sciences in the US (aside from this blog and a few others).

I particularly like author's designation of Chinese grad students as 'profit centers'.


www.bloomberg.com/news/2013-02-12/glut-of-foreign-students-hurts-u-s-innovation.html

Permalink to Comment

21. Titos on February 12, 2013 6:56 PM writes...

So, how does Pfizer job cuts over the last ten years compare with other big pharma companies? We always talk about Pfizer when it comes to reducing the work force but everyone else seems to have been similarly active if not more. Roche, Amgen, Merck, AstraZeneca, BMS, all have (are going to) reduced headcount in R&D in the US.

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22. SP on February 12, 2013 8:34 PM writes...

@16- LMGTFY
Vertex- Telaprevir, Ivacaftor
Ariad- Ponatinib
Genzyme- 15 products
Biogen- Avonex, Tysabri, Rituxan, Zevalin, Amevive (although don't know how many of those were San Diego based Idec)
Probably nothing from Novartis yet that can be attributed to their Cambridge site.
Don't know if anything is attributable to Amgen's Cambridge site.

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23. z on February 12, 2013 9:26 PM writes...

Why Cambridge? All the other hubs seem to have fizzled or have only occasional fits of growth. Cambridge seems to be the only place with continued activity. What's being done differently there compared to, say, New Jersey or North Carolina?

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24. SP on February 12, 2013 9:44 PM writes...

MIT and Harvard? (and Whitehead, Broad, MGH, DFCI, etc.?)

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25. AS on February 13, 2013 1:08 AM writes...

... Harvard Med, Children's, Beth Israel Deaconess, Brigham and Women's, Joslin, Mass College of Pharmacy, Northeastern, BU, Tufts Medical, etc.? There's also the fact that the Boston metro area receives 9% of all NIH award funding...

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26. harv93 on February 13, 2013 8:20 AM writes...

@23 (and @18) The current driver for where to locate a research instituion is access to innovation - i.e. great research universities. In Boston you have Harvard and MIT...Bay Area you have UCSF, Stanford, and Berkeley. In NJ you have...Rutgers (and Princeton, which is smaller). Rutgers is absorbing the UMDNJ medical school which will help, but it's not as developed as other clusters. NYC has great institutions and is picking up some steam in biotech, but real estate costs and comparative advantage vs. the finance industry are issues.

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27. Anonymous on February 13, 2013 8:35 AM writes...

@22
SP - Rather than just a simple Google search you might want to check the patents - this is a better place to look for who invented what and where. I'm not sure either of the Vertex cmpds you quote came from Cambridge. The CFTR stuff was West Coast and I have a feeling the HCV stuff was originally West Coast plus perhaps Eli Lilly? Happy to be corrected.

Inventorship is important to scientists and these things can get 'lost' in corporations but I think we should all try and acknowledge the true inventors when and where possible. Too often the original contributions are overlooked.

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28. SP on February 13, 2013 9:21 AM writes...

You want me to put how much effort into comment #22 to a blog post?

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29. pharmacologyrules on February 13, 2013 9:33 AM writes...

Pfired

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30. johnnyboy on February 13, 2013 9:40 AM writes...

@18 - I certainly understand why biotechs would want to set up shop in a hub like Cambridge, for the reasons you cite. What makes less sense is Big Pharma closing down sites to open others there. Big pharma sites already have all the support and infrastructure they need internally, or from long-time local providers. As far as collaborations with research centers, you don't need to be physically near them to collaborate - this is the 21st century, we have email, videoconferencing, etc... Closing established sites, which are often in average real estate value areas, to re-open them in the area with one of the highest property values in the country makes little financial sense. And as for the size and quality of the talent pool, if I was a pharma manager I'd worry a lot more about making it easier for my own workforce to leave for a small biotech than the other way around...

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31. z on February 13, 2013 11:09 AM writes...

@24-26 New Jersey isn't just Rutgers and Princeton, there's also ready access to Columbia and U Penn as well organizations like Sloan Kettering, UMDNJ, etc. Maybe things are a little more spread out, but collaboration would be easy. And anyway, how much collaboration really is, or needs to be, co-located and face-to-face? There also is (or was) a large population of highly talented Big Pharma people in NJ, enough for a critical mass. It seems like NJ could be (should be?) a vibrant research hub, but it isn't.

Is part of it just that Cambridge and the SF Bay Area have a reputation for innovation, so the most innovative people are drawn there, providing positive feedback that reinforces the reputation? What could a place like NJ do to change its culture, and regain some of this innovation? Or is it a lost cause?

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32. SP on February 13, 2013 11:29 AM writes...

There's a big difference between "collaboration would be easy" and "Hey, let's grab coffee and chat about robotics." I can walk down the street and have former coworkers share their complains about reagent X or instrument Y, and while formal collaborations can happen easily within 50 miles, the informal stuff can't.

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33. My 0.02 on February 13, 2013 11:56 AM writes...

@31,

There are a few others in NYC - Cornell med school, Mt Sinai, NYU, Albert Einstein, and Rockefeller,

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34. z on February 13, 2013 1:03 PM writes...

How important is informal collaboration? (I'm asking because I don't know, I'm not trying to be antagonistic). I have no doubt that it is very important to interact with people to refine your own ideas, to cross-fertilize ideas, etc. But has there been any way to measure how effective these sorts of coffee shop interactions are compared to other, more formal interactions?

And does it change with size of the company? I've only ever worked for big pharma, in spaces that have been designed to facilitate internal collaboration. There are a lot of people with diverse backgrounds and interests around, so I can usually have rewarding discussions, although I often have to seek them out, and I have noticed that most of the designated mingling areas tend to remain empty. Since most of these places are being shut down, and most of the focus has turned to hubs like Boston, it seems that Big Pharma management is willing to bet on the importance of the kind of culture you describe. Do we have any figures about the returns on that sort of investment?

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35. johnnyboy on February 13, 2013 5:05 PM writes...

Considering how pharma companies are fiercely competitive and paranoid about information getting out, I just don't buy the argument that the mere physical proximity to other companies and research centers could lead to spontaneous exchange of ideas, at least not in any meaningful and substantive way (ie. substantive enough to justify the millions that it cost to expand or relocalize there). When you need to have someone outside the company sign a non-disclosure agreement for you to just talk to them, spontaneous and informal coffee-chat about internal programs just ain't gonna happen - or if it does, you're probably breaking company rules.

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36. rx4reality on February 14, 2013 9:54 AM writes...

It likely has more to do with vulture capitalism than anything remotely intellectual.

Hub cities are awash in a sea of young (cheap to insure), typically poor (eager to work 80 hours/wk for 65% of the pay), "doctoral"-level scientists (a Chinese MD is considered a doctorate by many). First, the vulture capitalist PI's at MIT and Harvard fill their labs with cheap J-1 labor, which in 3 years gets dumped into the local employment market, driving down wages for everyone.

Furthermore, the ready availability of jobs in other exploitive high tech industries makes it more likely that a spouse/partner will find a similarly underpaying job nearby, thus making what would otherwise be a horrendously unaffordable city a viable financial option. Take a look at big Pharma sites in Cambridge. The only thing lower than the average age is the average degree of fluency in English.

The "critical mass" and "industry-academia proximity" arguments are just a smoke screen for cheap labor conservatism. The people who reap huge bonuses for closing sites (realizing efficiencies of scale), firing veteran scientists (leveraging external resources), and ripping off universities for new targets (Academic "alliances") are also the first to excuse their company's poor productivity by saying all the low hanging fruit is gone.

The happenstance of drug approvals is a nice byproduct of all this cruise ship refurnishing.

This has nothing to do with innovation, it's all about keeping the investors happy and the year-end bonus money flowing. Don't look behind the curtain in Cambridge, the Wizard is vacationing in the Caribbean.

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37. anonymous on February 15, 2013 7:13 AM writes...

@36
Couldn't agree more with your well-considered vitriol !

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38. harv93 on February 15, 2013 2:36 PM writes...

@34 All (well, most) companies have smart scientists, but I think informal collaboration is the "secret sauce" that makes innovation happen, and I think smaller organizations, which financially are riskier, are better at having that environment. There have been studies that in organizations of

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