Bristol-Myers Squibb Co. to close Wallingford facility, hundreds of jobs to be relocated [Record Journal]

Record-Journal

WALLINGFORD — Bristol-Myers Squibb Co. will close its Research Parkway facility in early 2018, relocating up to 800 employees and eliminating about 100 jobs, the company announced Thursday. The company was Wallingford’s top taxpayer in 2014.

Many of the jobs will stay in state, while others are moving to Cambridge, Mass., and New Jersey, according Frederick Egenolf, director of corporate communications. News of the plans surprised state and local officials who immediately began discussing ways to mitigate the local impact. Bristol-Myers was the town’s top taxpayer in 2014 and is one of its largest employers.

Up to 500 positions will move to a new, as-of-yet undisclosed, location in Connecticut. The Wallingford site is currently the company’s only facility in the state.

About 200 employees from Wallingford will be relocated to Cambridge, Mass.; about 100 positions in the discovery, virology department will be eliminated; and about 100 will be relocated to New Jersey.

The move is part of the company’s plans to “expand its presence within hubs of scientific excellence and innovation,” according to a company statement.

Bristol-Myers Squibb plans to open a research site at 100 Binney St., in Cambridge in 2018 as well as expand its research and development discovery site in the San Francisco Bay Area. The company has signed a letter of intent for the Cambridge location and expects to sign a lease soon.

It will also relocate employees from Waltham, Mass., and central New Jersey, in addition to recruiting scientists in the Cambridge area to work at its new facility.

The New-York based drug maker announced a change in its research and development strategic focus in 2013, according Egenolf.

“At the time, we announced that we would focus on investing in priority areas such as immuno-oncology, delivering our late-stage pipeline across select therapeutic areas and focusing discovery to explore disease areas of highest unmet medical need where we can bring the greatest value,” Egenolf wrote in an email to the Record-Journal Thursday. “Consistent with this strategy, we will discontinue our early research efforts in virology by the end of 2015.”

The company will halt early-stage virology, including research in hepatitis B and HIV, which represented about 30 percent of its first quarter revenue. Oncology treatments made up about 22 percent, or $905 million, according to Bloomberg.com

A Bristol-Myers Squibb partnership, Allied-Bristol Life Sciences LLC, announced a licensing agreement three days ago with Harvard University based on auto-immune research developed at a Harvard lab as the first in a “series of discovery and development projects that Allied-Bristol Life Sciences intends to pursue,” according to a news release announcing the licensing deal.

In February, Bristol-Myers Squibb acquired Flexus Biosciences Inc., a privately held biotechnology company focused on the discovery and development of anti-cancer treatments. Bristol-Myers Squibb paid $800 million up front and will make development, regulatory and milestone payments up to $450 million, according to Bristol-Myers Squibb’s first-quarter financial report.

The company reported $4 billion in revenues in the first quarter of 2015, up from $3.8 billion for the same quarter 2014. It anticipates an earnings decline in the remaining quarters due to the expiration of its U.S. rights to prescription drug Abilify in April, according to the report.
Susan Froshauer president and chief executive officer of CURE, the state’s bio-pharma advocacy group, was encouraged that 500 bioscience jobs would remain in the state.

“I’m not stuck on this,” Froshauer said. “Bristol-Myers is doing heavy-duty research and development. The business model of the big companies are changing.”

Froshauer said tate bio-pharma companies are enjoying partnerships with Yale University and UConn, and pointed to Jackson Labs’ work in stem cell research, and companies such as Alexion Pharmaceuticals based in Cheshire.

“This looks a little bit like what Pfizer did when it moved a number of its research and development folks to Cambridge,” said Bruce Carlson, president and chief executive officer of the Connecticut Technology Council. “But they left a significant number of employees here. They want to be at the hotbed of research. What’s going on in Cambridge and San Francisco represents the leading research in the world. We have excellent research (Yale, New Haven and UConn) but we don’t have the critical mass that Cambridge and San Francisco have. We need to continue to work on making the critical mass so the next time a company is moving they see that it’s here.”

As the state works to build its bio-cluster developments in Branford, New Haven and Farmington, Carlson hopes state economic development officials are in talks with Bristol-Myers Squibb over where it intends to locate the 500 remaining employees.

“I’m sure some people reached out and discussions are going on,” Carlson said.

Jim Watson, spokesman at the state Department of Economic and Community Development, said he couldn’t comment on discussions the state may be having with companies for confidentiality reasons.

‘A major concern’

As Wallingford’s top taxpayer in 2014, Bristol-Myers Squibb had a total assessment of $107,763,380 and paid $2.96 million in local taxes.

The campus in Wallingford consists of four company-owned buildings on 180 acres of land. The 800,000-square-foot main building, as well as a maintenance building and power plant, were built in 1985, according to town records. In 2000, a 20,320-square-foot preschool was built for employees. The company’s overall footprint in Wallingford is “just under 1 million square feet,” Town Assessor Shelby Jackson said.
The main building is a multi-wing, single building “dedicated to drug discovery and drug development activities within the Research and Development,” according to the company’s website.

If the company still owns the property in 2018, after it closes down, and there isn’t a new tenant, it will still have to pay property taxes, Jackson said.

Mayor William W. Dickinson Jr. called the announcement Thursday a “major concern” that will significantly impact the town.

“They’re maintaining a presence in the state at 500 employees, but it’s not at this facility,” Dickinson said in a phone interview. “… It’s going to be a major development in terms of issues that arise out of it. The obvious thing it has an impact on is the delivery of our services because of its production of revenue.”

State Rep. Mary Mushinsky, D-Wallingford, said she was surprised at the announcement and was exploring ways the state could assist the town. She said she reached out to the Department of Labor to help the 100 employees that will lose their jobs, as well as the Department of Economic and Community Development to help find a new technology company to move into Wallingford.

While the company has not yet found another location in the state, Economic Development Commission Chairman Joe Mirra said the town is trying to figure out if it would be possible to keep Bristol-Myers Squibb in Wallingford.

“What’s happening in that industry is there’s a lot of clustering, so I don’t know if they’re partnering with someone else,” Mirra said.

The specialized use of the facility at 5 Research Parkway could limit the number of potential buyers, Jackson said. Another possibility is changing the use of the property, he added. With the size of the property and number of buildings, Jackson said possibilities include converting it into a community college or industrial park. “Hopefully a prospect steps up and we can keep them on the tax roll,” Jackson said.

Mushinsky said the General Assembly might be able to approve the creation of an enterprise zone for the property during the special legislative session that begins next week.

In 2014, a tract of land surrounding the U.S. Postal Service sorting and distributing facility on Research Parkway became a state-subsidized enterprise zone.

“It’s a big closing, so that’s another possible option,” Mushinsky said. “I’d have to work with the whole delegation and the town to see if it wants to pursue that path.”

An enterprise zone offers businesses a five-year, 80-percent abatement on local property taxes. A 10-year, 50-percent corporate tax credit is also available.

DeLauro, Malloy react

U.S. Rep. Rosa DeLauro said in a statement she was “deeply troubled” by Bristol-Myers Squibb’s announcement Thursday morning and how it would impact employees in Wallingford.

“This facility’s closure will devastate these workers’ lives and those of their families, while hurting the Town of Wallingford,” DeLauro said. “I stand ready to help the affected workers and urge those in need of assistance to contact my office.”

Devon Puglia, director of media relations for Gov. Dannel P. Malloy, said the announcement is “isolated, unfortunate news as part of a restructuring,” and added that the state is “making progress not just for the next fiscal quarter, but for the next quarter century.

“Each and every day we’re making progress. Unemployment is now at a seven-year low — even lower than New York City’s — as just last month we created 6,400 jobs. We are no doubt moving forward,” Puglia wrote in an email to the Record-Journal. “… There are dozens of recent success stories that don’t generate headlines about companies expanding operations in or relocating to our state.”

Senate Minority Leader Len Fasano and House Deputy Minority Leader Vincent Candelora issued a joint statement Thursday afternoon expressing disappointment with the decision to relocate. Fasano represents Wallingford in the Senate, while Candelora’s House district includes part of town.

“It is devastating to hear that a stable global company is yanking its presence in Connecticut,” they said. “People are losing their jobs, and many of those who may have an opportunity to keep them will be moving out of state. Clearly, economic advantages and disadvantages were considered when the company decided to close down existing locations in favor of a new location.”

A Bristol-Meyers representative told a local media outlet Thursday the decision to leave was made in 2013, and he would not discuss Connecticut’s business climate.

Wall Street’s response to Thursday’s announcement was mixed. Stock prices (NYSE:BMY) rose from $67 per share to $67.59 as news reached investors mid-morning before returning to $66.8 at market close. More than five million trades were reported Thursday afternoon.