Lilly to shutter U.S., China R&D centers

As part of a major series of global cuts across its divisions, Eli Lilly is putting two research centers on the chopping block.

In an update posted this morning, Lilly said it would be shuttering "a research and development office in Bridgewater, New Jersey, and the Lilly China Research and Development Center in Shanghai, China."

The NJ center was acquired as part of its purchase of cancer biotech ImClone nine years ago, while its Shanghai center was only opened five years ago, with a focus on boosting its Asia footprint and on work in diabetes. When opened in 2012, it had 150 staffers, mainly from China. It did not given the numbers of staffers affected, or whether any will move across to other positions.

The cuts come as it "streamlines its pharmaceutical research and development activities." The U.S. Big Pharma, which has seen a fairly barren patch of successful R&D in the past two years, will also "further consolidate some work to its existing shared service centers."

Just six weeks ago, Lilly said it was seeking partners for two-thirds of its midphase oncology compounds to focus its R&D dollars on a clutch of early to midstage assets it thinks can become the new standard of care.

Lilly is prioritizing the development of seven candidates, including breast cancer drug abemaciclib, with two of the remaining six in phase 2, while the rest are yet to get out of phase 1. The list includes a PD-L1 antibody and PI3K/mTOR dual inhibitor Lilly is developing for use in combinations. And the small-molecule Chk-1 inhibitor it picked up from Array BioPharma.

The decision to cull some of its cancer pipeline coincided with a recent setback for Lilly’s baricitinib. The Incyte-partnered rheumatoid arthritis drug was due to come to market this year. But a demand by FDA for another study to allay its concerns about the incidence of blood clots looks has pushed back its deadline.

Back in February, Lilly also said it was looking for 200 staffers from multiple R&D sites around the world to voluntarily sign up to leave the company. This was sold as a tweaking of the Lilly R&D machine ahead of renewed investment in specific areas of the operation, but came not long after larger cuts, which themselves followed the fading of expectations for Alzheimer’s flop solanezumab and subsequent retreat from the program.

Today's R&D ax falls amid a larger culling of around 3,500 workers across the company, including in manufacturing and other areas, and it hopes to do this via voluntary and/or early retirement. It’s all based around saving costs, namely $500 million a year, which should start from 2018.

Its China research cull comes month after fellow Big Pharma GSK also announced it would be closing down its central neuroscience R&D hub in China, and move positions over to the U.S., amid an R&D restructure from new CEO.