Merger Flu Lethal to Six Pfizer R&D Sites and 2,000 Employees

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Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas)--Early Monday morning, the buzz at the International Society of Pharmaceutical Engineers (ISPE) conference in San Diego, California, was that Pfizer Incorporated (NYSE:PFE) (New York, New York) was planning to sell its massive St. Louis/Chesterfield, Missouri, research site to Monsanto Company (NYSE:MON) (St. Louis). By day's end, the truth had proven to be more dramatic than the rumors: To achieve a 35% reduction in global square footage, the company is going to close six research and development sites across the United States and lay off an estimated 2,000 people.

The news follows Pfizer's $68 billion purchase of Wyeth Pharmaceuticals and intense site rationalization studies. The research and development operations will be phased out during the next year, leaving Pfizer with five research hubs and nine specialized sites around the world.

The company's five main research hubs will be comprised of the following existing Pfizer and Wyeth locations:

• Cambridge, Massachusetts
• Groton, Connecticut
• Pearl River, New York
• La Jolla, California
• Sandwich, England

A number of current research activities will be moved from Collegeville, Pennsylvania; Pearl River, New York; and St. Louis, Missouri, to other locations. Pfizer will cease all research and development operations in Princeton, New Jersey; Chazy, Rouses Point and Plattsburgh, New York; and Sanford and Durham/Research Triangle Park, North Carolina.

In the Monsanto deal, Pfizer will pocket $450 million from its Chesterfield Village Research Center and will continue to conduct biotherapeutic pharmaceutical research there, under a lease agreement. The package includes 1.3 million square feet and more than 200 laboratories. Pfizer recently invested $250 million to add 300,000 square feet of new laboratory space and expand its Biologics Pilot Plant Building JJ by 60,000 square feet.

The origin and history of the St. Louis/Chesterfield operations are a stunning example of the convoluted road of big pharma deals. Monsanto was the original owner of the property, which opened in 1984. Operating primarily as a life sciences research company, Monsanto merged with Pharmacia & Upjohn in 2002, calling the new company the Pharmacia Corporation. In 2002, it was spun off from Pharmacia as an independent company focused solely on agriculture. Pfizer entered the picture with its purchase of Pharmacia in 2003, which in turn brought the St. Louis/Chesterfield properties into its growing facility portfolio.

As Pfizer has not finished with its site rationalization studies, the company's stable of manufacturing sites now await their individual fates. The company expects to have that process concluded within the next several months. Unfortunately, it is a process that is being repeated throughout the industry, with more news of site closings, consolidations and layoffs expected in the future.

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