Bayer To Cut 540 Emeryville Jobs

Reprinted from the Contra Costa Times:

Bayer to cut 540 jobs in Emeryville

By David Morrill
Contra Costa Times

Posted: 05/26/2011 02:37:58 PM PDT

Updated: 05/26/2011 05:06:02 PM PDT
Bayer HealthCare announced late Wednesday that it will wind down its multiple sclerosis drug production in Emeryville, resulting in the loss of about 540 jobs starting next year and the vacating of more than 300,000 square feet of office space.

The move will result in the company's multiple sclerosis drug, Betaseron, being moved to Germany. It eventually will be produced entirely under contract by pharmaceutical giant Boehringer Ingelheim, which currently makes the drug for overseas use. Bayer HealthCare's sales of the drug topped $1.6 billion last year.

No workers will be laid off in 2011, but all layoffs will be completed by 2013, said Joerg Heidrich, global head of biotech product supply for Bayer HealthCare. Employees who stay on until the transaction is complete will receive an undisclosed bonus, executives said.

"We are really proud of the employees here in Emeryville and what they've done," said Catherine Anderson, a spokeswoman for Bayer HealthCare. "It has nothing to do with site performance, but rather about Bayer trying to get greater flexibility in this marketplace."

Multiple sclerosis drugs are part of an extremely competitive market; players include Biogen, Pfizer, Merck, and Novartis.

"I'm not surprised at all, because at the end of the day, it's about being as efficient as possible for these companies," said John McCamant, editor of the Medical Technology Stockletter in Berkeley. "We see moves like this all the time

as companies try to stay competitive.   

Even though Bayer HealthCare is leaving Emeryville, it will continue to have a strong presence in the Bay Area.

Its largest footprint is in Berkeley, where it has about 1,200 employees on a 43-acre campus. In 2009, Bayer announced that it was putting more than $100 million to upgrade and improve its manufacturing capabilities there. This campus is where its hemophilia drug, Kogenate, is manufactured.

Bayer HealthCare also has about 70 employees at Mission Bay in San Francisco, where its hematology research program is based.

Besides cost cuts, the move coincides with the end of a six-year lease the company signed with multiple landlords, including biopharmaceutical company Novartis and EmeryStation East in Sept. 2007. Most of the six buildings, including the headquarters at 5650 Hollis St., will be returned to Novartis. According to a statement from Novartis, the company currently has no plans for the buildings.

Bayer is Emeryville's third-largest employer. Based on 2010 employment, Pixar is first with 1,200 employees; Novartis is second with 797.

"We think it's sad Bayer is closing and choosing to leave Emeryville because they've been really active here in the community," she said. "Hopefully as the economy recovers, it won't be to hard to fill the space."

In total, about 1.5 million square feet of space in Emeryville and Berkeley is devoted to life science use with about a 1 percent vacancy rate.

Contact David Morrill at 925-977-8534.