Merck to close r&d and manufacturing sites
Result of merger with Schering-Plough
Merck & Co (MSD) is to close eight research sites and eight manufacturing plants, as well as continue to merge office facilities worldwide as a result of the acquisition of Schering-Plough last November.
Operations will be phased out over the next two years at research sites in Montreal, Canada; Boxmeer (Nobilon facility only), Oss, and Schaijk, Netherlands; Odense, Denmark; Waltrop, Germany; Newhouse, Scotland; and Cambridge (Kendall Square), Massachusetts, US.
The research division will retain its focus on seven key therapeutic franchise areas of cardiovascular disease; diabetes and obesity; infectious disease; oncology; neuroscience and ophthalmology; respiratory and immunology; and women's health and endocrine. MSD's women's health research, currently centred on Oss, will be relocated primarily to the US.
Operations will cease at eight manufacturing facilities in Comazzo, Italy; Cacem, Portugal; Azcapotzalco, Mexico; Coyoacan, Mexico, and Santo Amaro, Brazil.
MSD also intends to sell the Mirador, Argentina and Miami Lakes, Florida, facilities.
In Singapore, chemical manufacturing will be phased out at the Merck site, but will continue at what was the Schering-Plough site. The company's extensive pharmaceutical manufacturing operations will continue at these two Singapore plants.
‘These changes are crucial to drive future growth and realise the promise of being a global healthcare leader for the long term,’ said Richard Clark, chairman and chief executive officer of Merck.
The company said the goal is to create a flexible r&d organisation that ‘cultivates scientific innovation, facilitates external collaboration and drives pipeline progress’ and a ‘more fully utilised and cost-efficient worldwide manufacturing supply chain’.
MSD’s total workforce will be reduced by approximately 15% worldwide as part of the initial phases of this restructuring programme.
The company aims to achieve ongoing annual savings of US$3.5bn in 2012. The initial phases of the restructuring programme are expected to save approximately US$2.7–US$3.1bn of this target.
MSD said it would continue to hire new employees in strategic growth areas of the business such as emerging markets, biologics, vaccines and consumer care.
MSD is making new investments in the emerging market of Latin America, for example, at its Xochimilco, Mexico and Campinas, Brazil facilities to increase capacity.
These plans, as well as other actions taken since the merger, will reduce MSD's manufacturing network from 91 to 77 facilities. This includes 29 animal health facilities that are the subject of the planned joint venture of Intervet Schering-Plough with sanofi-aventis's Merial, which are not included in this restructuring programme.