Merck & Co. Slashes Contractor Positions at Durham Vaccine Manufacturing Plant
June 29, 2015
By Alex Keown, BioSpace.com Breaking News Staff
DURHAM, N.C. – Merck & Co. terminated an unknown number of independent contractors this week at the pharmaceutical giant’s vaccine manufacturing site in central North Carolina, casualties of the company’s consolidation plan, WRAL reported this morning.
WRAL noted that the terminations impacted “dozens” of Merck contractors, but the company did not provide a specific number of employees. No full time employees were impacted in the terminations, a Merck spokesperson said.
In 2013 Merck targeted $2.5 billion in cuts in annual operating expenses by the end of 2015. At the time the cuts were announced, Merck Chairman Kenneth Frazier said the initiative to sharpen the company’s commercial and research and development programs “will make Merck a more competitive company, better positioned to drive innovation and to more effectively commercialize medicines and vaccines for the people who need them.” Merck officials expect the majority of savings from the implementation of the initiative, will come from marketing and administrative expenses and research and development.
Part of the operating cuts include consolidating of office space and sale of real estate the company no longer uses, including Merck’s former 1 million-square-foot headquarters in Whitehouse Station, N.J. The space was vacated by Merck last year. Merck also closed a facility in Summit, N.J. last year. Merck anticipates the consolidation plan will result in approximately the termination of 7.500 employees, about 20 percent of the company’s workforce. Merck said the cuts should provide pre-tax savings of between $2.5 and $3 billion. Merck cut approximately 8,500 jobs in 2013.
The vaccine market is highly lucrative, with EvaluatePharma (EP) recently predicting the world drug market would hit $1 trillion in the next five years. The company predicted Merck will lead the way as one of the four companies predicted to dominate the market. Merck’s vaccine sales for 2014 were bout $5.3 billion and EP predicts that will increase to about $7.49 billion by 2020.
The recent jobs cuts re not expected to hamper that goal. Cheznee Johnson, a Merck spokesperson, told WRAL that despite the job cuts, the Durham site will continue to “manufacture the volume needed to meet customers’ needs.”
There are approximately 1,400 people employed at the Durham plant.
The Merck cuts came on top of positive news for the company. Today the company also announced that primary endpoints for Emend, the company’s injectable anti-nausea medication for chemotherapy patients, met its endpoints. The study showed the drug was highly effective in reducing nausea in patients compared to a placebo, the company said.
Also, late stage trials for Merck’s Keytruda showed the drug effective in treating patients with three types of cancer, melanoma, lung cancer and mesothelioma. The company said it will file for approval from the U.S. Food and Drug Administration (FDA) to treat patients with non-small cell lung cancer (NSCLC) whose disease has worsened despite previous treatment.
But it’s not all been positive drug development news for the company. In February the FDA snatched back its breakthrough therapy designation for grazoprevir/elbasvir, the company’s investigational oral, once-daily combination regimen for the treatment of chronic HCV infection. Merck announced the FDA’s decision in its fourth quarter earnings report, but said the company plans to “discuss this matter” with the FDA. A “breakthrough designation,” lets drugmakers work closely with the FDA to get experimental treatments submitted faster. Additionally Merck said they do not expect the FDA’s decision to impact its ability to file a new drug application (NDA) for the combination regimen.
Merck is not the only pharmaceutical company to slash jobs in North Carolina. British drugmaker GlaxoSmithKline eliminated 900 positions, Salix Pharmaceuticals, Ltd. terminated about one-third of its staff and Hospira, Inc. is closing a production plant, WRAL reported.
As Rumors Swirl About GlaxoSmithKline Bid, Who Could Suitors Be?
Rumors are swirling that Swiss-based Roche and U.S.-based Johnson & Johnson are eying the U.K. company for approximately $143 billion. But Roche and J&J aren’t the only companies though who have been thought could go after the elephant that is Glaxo.
Last month there was buzz that Pfizer Inc. was considering acquiring Glaxo, a year after it failed to acquire AstraZeneca PLC . Just this month over a third of respondents in a poll conducted by BioSpace believe that AstraZeneca PLC could be in the running to acquire struggling GlaxoSmithKline (GSK).
So BioSpace wants to ask our readers again what they predict for this new dealmaking bonanza. Will Glaxo go—and if so, to whom?