By Jeff Bahr
At a time when municipalities struggle to hang on to every job that they can, Swiss pharmaceutical giant, Roche, a commercial fixture in Nutley for more than 80 years, has announced its intention to close its research and development site in Nutley – an unfortunate development that will result in the loss of 1,000 jobs, or some 5% of its U.S. workforce.
All research and development activities will be “consolidated in Switzerland and Germany,” according to a Roche press release. The company plans to remediate the 127-acre property and then sell it off by 2015. A diagnostic facility in Branchburg will remain unaffected by the move.
The company that gave the world such groundbreaking drugs as Valium and Interferon has been moving on uncertain ground for some time now, according to Roche Chief Executive Officer Severin Schwan. Plummeting drug prices and continuing product setbacks have beleaguered the firm in recent years. A 2010 cost cutting plan cut 4,800 jobs from its workforce.
Despite such challenges the company still managed to forge ahead. In August 2011 it received approval from the U.S. Food & Drug Administration (FDA) for Zelboraf, a drug designed to combat late stage melanoma.
In a media statement, Schwan highlighted the positive happenings that have occurred at Roche, even as the company has been forced to downsize.
“Our R&D programs were exceptionally successful over the last 18 months, with 24 out of 28 late-stage clinical trials delivering positive results,” said the CEO. “The overall number of programs in clinical development has grown substantially. The planned consolidation of our research and early development organization and the refocusing of R&D activities in Switzerland and Germany will free up resources that we can invest in these promising clinical programs while also increasing our overall efficiency.”
Speaking to the net effect that the Nutley closure will have on workers suddenly left without jobs, Schwan sounded upbeat but stopped short of issuing a definitive plan. “In its 80-year history, our Nutley site has made significant contributions to Roche’s success,” said Schwan. “We will do everything we can to find socially responsible solutions for the employees affected by these changes.”
As Nutley’s single largest taxpayer the planned move has triggered concern throughout the community, and prompted its share of speculation. Nutley Mayor Alphonse Petracco said that Roche pays some $9 million in annual property taxes – a sizable sum by any yardstick. The company, according to Petracco, employs fewer than 100 Nutley residents.
Nutley Commissioner Steven Rogers voiced concerns over certain statements that have been made since Roche announced its closure – particularly by politicians and others who live outside of the township.
“I am making reference to some comments made by Assemblyman Gary Schaer (D-36th) when he apparently suggested on ABC news that services, in particular the fire department, would be the first to go,” said Rogers.
“This is an irresponsible statement that serves no purpose but to stir up fear and anxiety. The Nutley Board of Commissioners have this matter well in hand. The collective talents and skills that the Nutley Commissioners bring to the table will see us through this difficult time by working in partnership with state and county officials.” Rogers conceded that the closure – which he learned about just an hour before the formal announcement was made – is “no small thing,” but remained optimistic about the situation. “It’s up to us to address this in a very prudent way,” he said. “Americans are resilient – we know how to bounce back. And that’s especially true in Nutley.”
The move signals the end of a corporate era that began in 1929 when Hoffman–LaRoche (the firm’s incorporated name) installed their U.S. headquarters at 340 Kingsland St, Nutley.
Through the years the company has grown and contracted. The 15-story-tall Building # 76, located beside Rt. 3 in full view of commuters making their way to Manhattan, became something of a billboard for the prospering company during the 1960s with the name “Hoffman–LaRoche” prominently displayed on its east and west-facing walls. But a rash of economic side effects lay on the horizon. In 2001, the company laid off 3,000 workers worldwide, with 300 coming from its Nutley plant. In 2010, an additional 4,800 were let go worldwide.
With the Nutley closure, Roche joins the ranks of other major pharmaceutical manufacturers such as Novartis and Schering-Plough who, due to economic hardships have reduced their New Jersey operations or eliminated them altogether.