Under the new consolidation and streamlining process of research and development (R&D) activities, Roche Group has decided to close down its Nutly R&D facility at New Jersey and plans to consolidate the same in Switzerland and Germany to support efficient allocation of resources for the Group's expanding product development pipeline. The consolidation will be focusing more on oncology, virology, metabolism and neuroscience. Reorganization will enable Roche to keep Group R&D costs stable despite a strong increase in the number of clinical development projects in the last 18 months. The financial outlook for 2012 will remain unchanged.
Closure of US site in Nutley, New Jersey expected to result in a reduction of around 1,000 positions. Roche Group is setting up US East Coast Translational Clinical Research Centre. A location is being identified on the East Coast to focus on translational clinical research to support Roche US-based clinical trials and early development programmes, support and maintain Roche interactions with the US Food and Drug Administration (FDA), and enhance Roche’s collaborations with US based partners, such as academic institutions and biotech companies. This new centre is expected to host around 240 employees.
The new US East Coast Translational Research Clinical Centre is planned to be operational by early 2013. The transfer of business operations in Nutley is planned to be completed by end of 2013.
The Roche Group overall employs 20’800 people in the US and continues to strongly invest in pharma research & development in the United States through its Genentech organisation, which is based in South San Francisco and not affected by this reorganisation.
Meanwhile, Jean-Jacques Garaud, head of Roche Pharma Research and Early Development and member of the Enlarged Corporate Executive Committee, will leave the company on 30 June 2012. Mike Burgess will become acting head of Roche Pharma Research and Early Development.
Commenting on the consolidation, Roche CEO Severin Schwan said, “Our R&D programmes were exceptionally successful over the last 18 months, with 24 out of 28 late-stage clinical trials delivering positive results. The overall number of programmes in clinical development has grown substantially. The planned consolidation of our research and early development organization and the refocusing of R&D activities in Switzerland and Germany will free up resources that we can invest in these promising clinical programs while also increasing our overall efficiency.” He added, “In its 80-year old history, our Nutley site has made significant contributions to Roche’s success. We will do everything we can to find socially responsible solutions for the employees affected by these changes.”
The resulting savings from the global site consolidation and related infrastructure cost, the bundling of support functions as well as shifts in the portfolio will allow Roche to reallocate resources to the growing number of clinical programmes. As a result overall R&D expenditures are expected to remain stable. Roche will publish details of the expected financial impact of the planned measures, in particular one-time costs associated with the closure of the Nutley site, as part of its half-year results announcement on July 26. The financial outlook for 2012 remains unchanged.