Merck moving to regional R&D hubs: WSJ

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Merck is working to revamp its R&D unit by creating innovation hubs in or near Boston, the San Francisco Bay area, London and Shanghai, the Wall Street Journal reported Friday.

Those bases would be used to hunt for biopharma research ripe for either in-licensing or acquisition, the Journal reported based on sources the paper said are familiar with the changes (sub. req'd). The company is also selling several agents in its pipeline, the paper reports.

The overhaul represents a strategic shift for a drugmaker that has long shunned external revenue-sharing deals in favor of in-house development. Since 2009, Merck has done only 23 such deals, vs. 51 for J&J and 48 for Novartis, the WSJ points out.

R&D setbacks, like the delay on its odanacatib drug for osteoporosis, have put more pressure on the company to seek external innovation to bolster its pipeline and replace the revenue from expired blockbusters like asthma med Singulair.

The details behind the overhaul follow the hiring of new R&D head Roger Perlmutter in April and a plan that Merck said in October will reduce its workforce by 20% over the next two years. The company had reportedly begun laying off some R&D managers in June.

The regional hub plan is also used by drugmakers including Pfizer, J&J and GSK, the paper notes.

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