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Merck will close lab in Kendall Sq.

Drug maker cutting 16,000 jobs globally

By Robert Weisman
Globe Staff / July 9, 2010

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Pharmaceutical giant Merck & Co., running counter to other drug makers’ moves to expand operations in the Boston area, yesterday said it will shut a five-year-old Cambridge research lab as part of a global cutback that will reduce the company’s worldwide payroll by 16,000 jobs, about 15 percent.

Merck would not specify how many jobs will be eliminated at its Kendall Square operation, which was developing cancer drugs. The lab had about 100 employees early last year, when it was run by its former owner, drug maker Schering-Plough Corp. An unspecified number of workers will move to another Merck lab in Boston’s Longwood Medical Area, which also does cancer-drug research, a Merck spokesman said.

The Cambridge site is the only US research center scheduled to be closed as part of Merck’s global consolidation, which also will include the shuttering of seven research-and-development sites across Europe and in Canada over the next two years.

Merck’s decision comes as other global pharmaceutical companies, most recently Sanofi-Aventis AG of France and Eli Lilly & Co. of Indianapolis, are boosting their presence in the Boston area to capitalize on its academic labs and biotech start-ups.

“We’ll still have a presence in Boston,’’ said Ron Rogers, a spokesman at Merck’s headquarters in Whitehouse Station, N.J. “It’s an important presence. This announcement doesn’t change that.’’

Rogers would not disclose how many people Merck employs at its Boston research lab, which is near Harvard Medical School and many of the city’s Harvard-affiliated teaching hospitals. The lab had about 250 employees in March 2009, the company said at that time.

Merck’s consolidation, which began in the fourth quarter of last year, follows its $41.1 billion acquisition of fellow New Jersey drug maker Schering-Plough, which opened the Cambridge lab at the beginning of 2006 and doubled it in size about six months later. Merck’s goal is to save $3.5 billion annually by 2012. Toward that end, the company already has eliminated about 11,000 jobs. Yesterday’s announcement covered additional research and manufacturing jobs.

“There will be some head count reduction from Cambridge, and some people will move over to our Boston facility,’’ Rogers said.

Even as Merck prepares to scale back local operations, Sanofi-Aventis is leasing space in Cambridge, where it plans to open a headquarters for its new cancer division. The $65 million expansion is expected to create 300 jobs.

Other drug makers with Boston research centers in the Boston area include Novartis AG of Switzerland; Shire PLC, AstraZeneca PLC, and GlaxoSmithKline of Britain; Takeda Pharmaceutical Co. and Dainippon Sumitomo Pharma Co. of Japan; and US pharmaceutical colossus Pfizer Inc. of New York. Last week, Lilly said it was grabbing a foothold in the area by purchasing Alnara Pharmaceuticals Inc.

Merck KGaA, a German drug and chemicals company unrelated to Merck & Co., in March said it plans to move the headquarters of its US chemicals business to Billerica after its acquisition of life sciences toolmaker Millipore Corp. With that buyout, Germany’s Merck will have 1,676 employees in Massachusetts and New Hampshire.

Robert Weisman can be reached at weisman@globe.com.