UPDATED: Daiichi caps layoffs drive by melding NJ ops into one HQ

Daiichi

After a rash of layoffs in its U.S. operations, Japanese drugmaker Daiichi Sankyo plans to consolidate its R&D and commercial operations in a new facility in Basking Ridge, NJ.

Last year, the company went through one round of administrative job cuts in the spring and then announced 1,000 to 1,200 layoffs for its commercial operations at its Parsippany, NJ, headquarters, in its U.S. salesforce in the field, and in other HQ functions.

Those cuts were due to wrap up at the end of last month, and now, the company says it’s going to shrink its list of facilities, too. The Parsippany headquarters and commercial operations will join up with the R&D division that’s now set in Edison, NJ. About 650 to 700 employees will make the move, spokeswoman Kim Wix said, and the size of the space will be roughly the same as its previous digs combined.

The relocation is part of Daiichi’s cost-cutting efforts, the company said in a statement, but it’s also designed to bring the commercial and development staffs into one building so they can work more closely together.

“Uniting our New Jersey-based personnel into a single location not only makes us more efficient, but it will also further strengthen collaboration among teams working across the entire life cycle of our medicines," said Dr. Glenn Gormley, chairman and president of Daiichi’s U.S. business.

The consolidation in the U.S. is just part of the Japan-based company’s retrenchment worldwide. Last month, it said it would shut down a plant in its home country. Production at the drug ingredient facility was due to stop by month’s end, and the company did not disclose the fate of its 150 employees. Back in December, Daiichi shuttered its antibody subsidiary in Germany, dubbed U3. The company had bought U3 back in 2008 for €150 million, to get its hands on a cancer drug candidate and other potential meds. The drugs hadn’t made much progress since, and Daiichi decided to transfer that R&D to its biologics facility in Tokyo, where the candidates could be watched more closely.

The cuts are part of a companywide reorganization as Daiichi faces generic competition for its $2.6 billion blood pressure drug Benicar. To fill the looming gap, the company is shifting toward specialty drugs--such as its new clot-fighting pill Savaysa and constipation drug Movantik, marketed with AstraZeneca ($AZN)--and away from primary care meds. Benicar’s $2.6 billion in 2014 sales accounted for more than one-quarter of Daiichi's revenue that year.

The company has its work cut out for it, however. Savaysa faces a rough road as the fourth drug in a next-gen anticoagulant market that already includes heavyweights Xarelto from Johnson & Johnson ($JNJ) and Bayer; Boehringer Ingelheim's Pradaxa; and Pfizer ($PFE) and Bristol-Myers Squibb's ($BMY) Eliquis. Analysts figure Daiichi's entrant can get up to $220 million in sales by 2019, but that's not nearly enough to bridge the Benicar gap.

Meanwhile, the company paid $200 million in 2014 to sign on with AstraZeneca on Movantik marketing and last September snapped up a license to sell AZ’s FluMist Quadrivalent vaccine in Japan.

- see the release from Daiichi

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Editor's note: This story was updated to clarify that the size of Daiichi's new headquarters is no smaller than its previous space spread among several facilities.

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