Continental drift claims Singapore, Shanghai units as Novartis revamp shifts R&D westward

Novartis HQ cropped

Novartis will shut down an R&D facility in China and move a second from Singapore to the U.S. as part of a wide-ranging revamp of its research base.

Under the plan, Novartis will create two new research hubs near its headquarters in Basel and in Cambridge, MA, the site of the Novartis Institutes for Biomedical Research (NIBR). A Swiss biologics unit called ESBATech that focuses on eye disease research and has around 73 employees is also facing the ax, according to an emailed statement. 

The Swiss pharma giant's R&D revamp comes shortly after it decided to shut down its cell and gene therapy unit with the loss of around 120 jobs. It followed sweeping changes to Novartis' structure announced earlier this year, which involved splitting its pharma business in two and putting all its cancer programs together in a separate division. The moves were designed to cut costs and centralize oversight of its R&D as Novartis integrated the oncology business it acquired from GlaxoSmithKline in a multibillion-dollar asset swap that closed last year.

Closing down two Asian R&D units goes against the prevailing trend in pharma to bulk up in the region; in fact, AbbVie just opened the first phase of a $320 million manufacturing site just last week. But Novartis insists the shift has no impact on the drugmaker's plans to develop Shanghai into a third global R&D hub. The $1 billion Shanghai campus opened earlier this year and currently employs some 500 scientists.

Its decision to close the Shanghai unit will result in 18 job losses, according to an Endpoints report, and stems from the consolidation of early-stage drug discovery activities into a Chemical Biology and Therapeutics team based at the Basel and Cambridge hubs. The two hubs will also house new centers of excellence for biotherapeutics research, focusing on improving the delivery of biologic drugs, with 20-25 new positions will be created in Basel. 

"A review of our biologics portfolio and organization concluded that our bio-therapeutic expertise is inefficiently spread across our Cambridge, Shanghai, Basel and Schlieren sites," said a Novartis spokesman.

"With the proposed change in our approach to biologics research we believe that we can serve Shanghai's biologics needs from Cambridge and Basel," he added.

Meanwhile, the affected Singapore unit is the Novartis Institute for Tropical Diseases (NITD), which will be shut down and its operations moved to Emeryville, CA. Around 85 scientists and support staff will be affected by the decision, according to the Straits Times.

The decision is a blow to Singapore's biopharma sector, which has punched well above its weight for many years, but has seen both manufacturing output and employment levels shrink of late. The NITD was one of the first big pharma facilities to move into the island state's Biopolis hub in 2004 and has chalked up some notable successes since, including the discovery of two new antimalarial drugs.

Singapore's relatively isolated location seems to have countered against it, with NIBR President Jay Bradner indicating that the move to California is "really intended to empower the research through the strength of collaborative proximity."

Locating the NITD in the Bay Area puts the unit close to prominent academic institutions as well as a host of biopharma companies. Novartis insisted it is still committed to Singapore however, employing 1,500 people there across a regional headquarters and four manufacturing plants.

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