Streams

For Sale: Giant, Empty Pill Factories

Friday, July 18, 2014

Ten miles from Midtown Manhattan in suburban Nutley, New Jersey is the 116-acre campus of Roche, the Swiss drug maker best known for developing Avastin, Valium and Tamiflu.

The site has enough square feet of laboratories, offices and auditoriums to nearly fill up the Empire State Building.

But since December, the labs have been dark, the sidewalks deserted and eerily silent. 

"It's a little heartbreaking," said Roche spokesperson Darien Wilson, who has worked on the campus since 1983. "This was really a thriving site, but in the business world, changes happen."

New Jersey used to be known as "the nation's medicine chest," but mergers and acquisitions have siphoned thousands of jobs from the state. 

In 1990, New Jersey's 41,900 pharmaceutical manufacturing jobs accounted for 20.2 percent of the U.S. pharma industry. In 2013, after years of decline, the state's share was 9.7 percent, or 26,900 jobs.

"Every time there's a merger or one company acquires another company, there's a reduction in force," said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. "There's been furious mergers and acquisitions in the pharma industry, particularly over the last 10 years."

Another reason pharma is shrinking in the state is that cutting-edge research is no longer being conducted on closed campuses in the suburbs. Instead, the action has moved to small, collaborative facilities in cities and on university campuses.

"The new innovation in biotech, in genomics is happening elsewhere. It's happening in places where there are graduate educational institutions that have research faculty doing that, and New Jersey really doesn't have that," said Erik Gordon, professor at the Ross School of Business at the University of Michigan.

A look at venture capital funding finds the big winners in this arena are Silicon Valley, Boston, San Diego and New York City. 

As Roche makes the pitch to sell its campus, it's not alone. Merck is selling its World Headquarters in Whitehouse Station and its R&D campus in Summit as the drug maker consolidates operations at its Kenilworth facility. 

According to a March 2014 report from Jones Lang LaSalle, 38.5 percent of the life sciences office and lab space in Northern New Jersey and 23.5 percent in Central Jersey is currently vacant. The commercial real estate firm is currently marketing the Roche campus. So far, it has shown the property to about 35 prospective buyers. One of the chief selling points in the pitch is its proximity to New York City, Newark Liberty International Airport and public transportation. 

"Hiring young, talented people is really important to these companies, and that population of upcoming talent is more into the city life," said JLL managing director Tom Stanton.

Stanton is marketing the site for a single buyer, but he said that could change if he cannot secure a bid by the end of the year.

Many in New Jersey's pharma industry suggest the only way to deal with these large, empty pharma campuses is to break them up and make them available for biotech companies looking for space. The number of biotechs in the state has more than quadrupled to 350 in the last 15 years.

That model is taking shape at a former Sanofi facility in Bridgewater, now known as the New Jersey Center of Excellence.

Amneal Pharmaceuticals, a generic drug maker, has taken over some lab space, as well as chemical company Ashland. And there's still enough vacant R&D labs and office space for several more companies to move in.

Tags:

More in:

Comments [1]

Nikki Davis

Reminds me of what Detroit looks like...

Jul. 24 2014 12:07 PM

Leave a Comment

Email addresses are required but never displayed.

Get the WNYC Morning Brief in your inbox.
We'll send you our top 5 stories every day, plus breaking news and weather.

Sponsored

Latest Newscast

 

 

Support

WNYC is supported by the Charles H. Revson Foundation: Because a great city needs an informed and engaged public

Feeds

Supported by