Pfizer cuts may foreshadow bad news for Groton site

For drug researcher James O'Malley, the decision to cut 1,100 local jobs at Pfizer Inc. and clear out drug-discovery scientists from the company's Groton laboratories is an ominous sign.

"It means Groton is no longer an important site," said O'Malley, the victim of a Pfizer layoff in 2007 who subsequently opened his own New London biotech firm called Myometrics. "I just don't think Groton has more than five years now (before it closes)."

Asked whether the New York-based company has a long-term commitment to the local labs, Pfizer spokeswoman Sperry Mylott said, "As a Center of Excellence for Discovery and Development Sciences, Groton remains a core element of our R&D strategy."

But O'Malley and others said they see a similar sequence playing out here to one that previously occurred at Pfizer's laboratories in St. Louis, where discovery scientists were the first to go. This was followed a little more than a year ago by Pfizer's decision to sell its St. Louis laboratories to Monsanto, leaving hundreds there out of work.

Some now wonder what Pfizer's long-term intentions are following its decision last week to downsize and reorganize its research-and-development structure, leaving about 3,400 employees at its Groton labs by sometime next year, down from the current 4,500.

The possible regulatory approval of several new prospective blockbusters in Pfizer's late-stage drug pipeline, say analysts, could result in renewed growth at the Groton campus.

"I think the pipeline will improve - and ultimately the 3,400 figure will grow," said Paul Pescatello, president of the New Haven-based industry group Connecticut United for Research Excellence, who has spoken with Pfizer officials about its local commitment.

Pescatello said he believes Groton's new role as a support center for Pfizer's drug-development worldwide might actually insulate the local work force from further job losses because of the sophisticated type of work required to make a medicine that leads to consistent results in the human body.

"Its position in the Pfizer world is more secure," Pescatello said. "That kind of work can't be easily done by an outsourced group."

Ronald Angelo, deputy commissioner of the state Department of Economic and Community Development, added that the Malloy administration is very concerned about the high-level talent that will be leaving the region and moving on to Cambridge, Mass., and Shanghai, China.

"We want to make sure we are much more proactive (than the Rell administration)," he said. "We want to expand biotech and biosciences jobs in Connecticut."

Among Malloy's economic talking points on the campaign trail last fall was the idea of using nearly $1 billion in unused state tax credits to spur R&D jobs in Connecticut.

Les Funtleyder, a health care analyst for the brokerage house Miller Tabak & Co. in New York City, said one way for Pfizer to show its support for departing scientists - and perhaps sow the seeds for a local biotech hot bed - would be to allow researchers to bring their intellectual property with them as they leave.

The hope would be that these well-trained scientists might stay in Connecticut, he said, and discover new medicines that Pfizer could then help develop or cash in on by selling their ownership share to other companies.

"It would be something Pfizer hasn't done that would be out of the box - thinking that's value-creating," Funtleyder said. "It would be a win-win."

Pfizer said it will consider outlicensing deals with its former employees and would be open to proposals both before and after a scientist leaves the company, though only for drugs in disease areas it no longer is exploring. Still, such deals have been few and far between, and one of the few, an equity investment in a start-up firm called RaQualia Pharma Inc., occurred more than two years ago.

Whether it's through the state's biotech incubator program at Avery Point in Groton or the encouragement of Pfizer's expanded outlicensing of intellectual property, drug researcher O'Malley said now is the time for Connecticut to take bold steps to ensure talented people remain in the region.

"This is our last chance to get an industry going here ... before it's largely gone," he said. "Something has to be on the board in the next six months."


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