Preclinical Research

Novartis closing UK site, but will $1m per week R&D spend benefit CROs?

27-Feb-2014
Last updated the 27-Feb-2014 at 17:32 GMT - By Dan Stanton
Horsham, UK R&D site confirmed to close by June
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Novartis says it will continue to spend around $1m a week on clinical trials in the UK after its R&D site closes in June.

Novartis began assessing the future of the R&D site Horsham, West Sussex in November 2013, having already trimmed down the workforce two years prior.

Earlier today the Switzerland-headquartered pharma giant announced it would close the site and confirmed that 371 in-house employees and 170 third-party contractors will lose their jobs when research activities stop at the end of June.

“This is a result of a global review of our R&D locations and where best to co-locate research teams to support collaboration,” Novartis spokesperson Anja von Treskow told Outsourcing-Pharma.com this morning.

Whilst Novartis remains committed to the UK with manufacturing sites in Grimsby and Dundee, patient diagnostic testing product site in Kent and offices in Surrey, the Horsham site – once the global centre for respiratory research for Novartis Institutes for BioMedical Research (NIBR) - was its only R&D site in the country.

However, von Treskow continued, the closure does not mean an end to clinical research for Novartis in the UK. “Novartis will continue to invest in clinical research and invests approximately $1m [€730,000] each week in UK clinical trials,” she told us.

“The company is a leading inward investor in healthcare innovation and around 10% of commercially sponsored clinical trials in the UK are run by Novartis, including 42% of all ophthalmology trials.”

Outsourcing Opportunities?

With the promise of continued investment in R&D but less in-house capacity we asked von Treskow if this would mean Novartis would be increasing its reliance on contract research organisations (CROs) but

“[I] wouldn’t say we outsource more as globally our approach is to optimize our global footprint across our different research sites,” she said. “NIBR can continue to invest in the discovery of new medicines and pursue new scientific directions, we regularly evaluate how to improve efficiency and reduce bureaucracy in our global operations.”

This morning UK-based firm Horizon Discovery CEO Darrin Disley told Outsourcing-Pharma.com the Novartis situation could be an opportunity for a discovery company like Horizon, echoing suggestions by industry commentators that pharma cutbacks could benefit CROs.

For example, there has been some speculation that preclinical CRO Charles River Laboratories (CRL) will benefit from cuts at Merck & Co. totalling $2.5bn and mostly in R&D, announced last October.

Speaking at the JP Morgan Healthcare Conference last month, CRL’s CEO James Foster told investors “it would be surprising and disappointing if CRL weren't the beneficiary of such facilities going off line.”

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