Merck & Co. has chosen to phase out operations at eight research sites and eight manufacturing sites, as well as to continue to consolidate office facilities worldwide, as part of the global merger restructuring programme that began last December.

Merck plans to phase out operations at eight research sites over the next two years. These sites include: Montreal, Canada; Boxmeer (Nobilon facility only), Oss, and Schaijk, Netherlands; Odense, Denmark; Waltrop, Germany; Newhouse, Scotland; and Cambridge (Kendall Square), Massachusetts, U.S.

New network

The Merck Research Laboratories network is being restructured to ensure efficient and successful delivery of Merck’s pipeline of promising candidates.

The new network will be comprised of 16 major research and development facilities worldwide. Merck will retain clinical development and regulatory affairs expertise in major regions around the world including the U.S., Europe, Asia and Japan.

At the core of Merck’s research network are several large multidisciplinary sites that will support multiple research franchises.

The company’s research division will retain its focus on seven key therapeutic franchise areas: Cardiovascular Disease; Diabetes and Obesity; Infectious Disease; Oncology; Neuroscience and Ophthalmology; Respiratory and Immunology; and Women’s Health and Endocrine.

Merck’s women’s health research, currently centered in Oss, the Netherlands, will be relocated primarily to the U.S.

Beginning in the second half of 2010, the company will phase out operations at eight manufacturing facilities and these sites will exit the global network as activities are transferred to other locations.

Specifically, the company intends to cease manufacturing activities at its facilities in Comazzo, Italy; Cacem, Portugal; Azcapotzalco, Mexico; Coyoacan, Mexico, and Santo Amaro, Brazil, and intends to sell the Mirador, Argentina and Miami Lakes, Florida, facilities.

In Singapore, chemical manufacturing will be phased out at the legacy Merck site, but it will continue at the legacy Schering-Plough site. The company’s extensive pharmaceutical manufacturing operations will continue at these two Singapore facilities.

Jobs

In terms of the impact on pharmaceutical jobs, Merck shared that it continues to expect its total workforce to be reduced by approximately 15% across all areas of the combined company worldwide as part of the initial phases of its merger restructuring programme.

The company said it will continue to hire new employees in strategic growth areas of the business as necessary.

“While we believe these actions are necessary to support Merck’s competitive advantage, they required difficult decisions that will impact some of our colleagues, their families and local communities. We will implement our restructuring plans with the utmost care and respect for the hard-working and talented employees of Merck,” said Richard T. Clark, chairman and chief executive officer of Merck.

Target

The goal of the restructuring is to create a flexible R&D organisation that cultivates scientific innovation, facilitates external collaboration and drives pipeline progress and a reliable, more fully utilised and cost efficient worldwide manufacturing supply chain to support Merck’s broader product portfolio.

Merck said it remains committed to achieving its previously announced synergy target of $3.5 billion in ongoing annual savings in 2012. With the announcement of its latest plans, Merck expects the initial phases of the merger restructuring program to result in savings of approximately $2.7 to $3.1 billion in 2012 toward the $3.5 billion target.

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