AstraZeneca PLC to Shutter Pennsylvania Office, 134 Employees Affected

September 22, 2016
By Mark Terry, BioSpace.com Breaking News Staff

As AstraZeneca continues its restructuring and cost-cutting measures, it announced it is closing its office in Fort Washington, Pennsylvania. It also filed a notice with the state that 134 staffers will be affected. Jobs will be relocated to Wilmington, Delaware.

In late August, AstraZeneca placed its U.S. headquarters in Fairfax, Delaware, up for sale. The company was quick to say it hadn’t abandoned the area, and was still considering several options, including redevelopment.

Some of this is probably related to the company’s sale of its antibiotics business in August to Pfizer for $1.5 billion. AstraZeneca employed about 2,100 people in Delaware spread across a packaging facility in Newark and the Fairfax campus. The Delaware facility was heavily involved in its antibiotics business, as well as facilities in Boston and Gaithersburg, Maryland.

Another major factor is that in July, AstraZeneca, as part of its second-quarter financial reporting, noted a net loss of $3 million and a 22 percent drop in earnings. This is largely due to generic competition for some of its blockbuster drugs, such as cholesterol treatment Crestor, that have lost patent protection.

As a result, the company is trying to realign its focus to core platforms of respiratory, cancer and diabetes drugs. Those areas grew 8 percent in the second quarter of 2016 compared to the same period in 2015, hitting $3.7 billion.

In May, AstraZeneca announced that, as part of cost-cutting measures, it was cutting jobs in order to take $1 billion out of its budget by the end of 2017. Although specifics were not announced at that time, shortly afterwards it ended its relationship with 1,600 contractual sales representatives.

The Fort Washington office closing, however, does not appear to include layoffs. A spokeswoman for the company, Abigail Bozarth, said in a statement that “there have not been any reductions as part of the decision to close the Fort Washington office.”

Bozarth also indicated that for employees who met certain criteria and could not commute to Wilmington, will be eligible for severance.

Affected jobs include marketing, medical affairs, sales and “other enabling” functions, according to a company statement. “We are consolidating our footprint to create efficiencies and reduce expenses. Co-locating Fort Washington-based employees in Wilmington will also provide greater opportunity for closer collaboration and alignment within the U.S. business. We recognize change is difficult and are fully committed to working with employees to ensure they have the flexibility they need through this transition.”

In other news, the company withdrew an application with European regulatory authorities over an ovarian cancer drug, cediranib. It had submitted an application with the European Medicines Agency (EMA) in June 2015.

“Following lengthy engagement with the EMA, it was clear that there would remain a difference of opinion on the overall benefit-risk of cediranib and on some of the study methods,” a company spokeswoman told Bloomberg. “So, on balance, we decided to withdraw the application for combination with chemotherapy to focus our attention on combination studies of cediranib with other medicines.”

To date, AstraZeneca has not submitted cediranib for use with chemotherapy in any other markets.