AstraZeneca shakes up R&D division with 1,600 staff cuts and shift to biotech hot spots (video)

R&D pharma spending North CarolinaAstraZeneca (NYSE:AZN) is revamping its research and development divisions to improve drug development by cutting 1,600 from its global operations and focusing R&D staff in three sites including Gaithersburg, Maryland. It plans to ditch its London headquarters in favor of a new $500 million center in Cambridge in the UK by 2016. By focusing on areas around life science clusters, it hopes to increase collaboration and partnerships, according to a company statement.

Its U.S. operations will shed 650 jobs. Although Wilmington, Delaware, will remain its U.S. headquarters with 2,000 staff, about 170 will be relocated to other AstraZeneca sites in the U.S. and overseas. Gaithersburg is home to MedImmune, an AstraZeneca subsidiary acquired in 2007. It will see a net gain of 300 roles.

It will focus R&D operations across three sites: Gaithersburg, Cambridge and Mölndal, Sweden, near Gothenburg. Gaithersburg will house many of the company’s U.S.-based global medicines development activities for small and large molecules. The company is also shifting some of its global marketing and U.S. specialty care commercial functions to its offices there. Boston will also continue to support R&D for AstraZeneca with a focus on small molecules.

The pharmaceutical company said shifting its R&D sites to “bioscience hot spots” will make it easier to develop collaboration and partnership agreements. It will also help teams work more closely “to create a more vibrant environment” that puts more emphasis on science and patients. The changes will also “simplify the company’s footprint” and scale back and cut unnecessary costs.


The company expects the changes to result in a onetime $1.4 billion restructuring charge, but it sees annualized benefits of $190 million by 2016. Pharmalot noted that it marks the second significant overhaul for AstraZeneca in less than three months. In January, the company said Martin Mackay, its president of research and development was leaving as well as Tony Zook, its executive vice president for global commercial activities. At the time it said it was creating a new executive role that would bridge R&D and sales responsibilities, and adding new R&D roles.

The move by AstraZeneca reflects the pressure a lot of pharmaceuticals are feeling to cut costs and simultaneously inject more innovation into their businesses, with academic partnerships and collaborations offering one way to achieve that (here, here and here).  Gaithersburg, for example, is home to several research laboratories and biotech companies, and sits just outside Baltimore, home to Johns Hopkins University, with its extensive health and medical research facilities.

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