Glaxo boss says region could see more staffing

Posted: May 02, 2014

Amid the recent swirl of pharmaceutical company takeovers and trades, GlaxoSmithKline chief executive officer Andrew Witty said Wednesday that GSK might end up with more Philadelphia-area employees if a deal with Novartis is completed.

Witty said the business units joining GSK have about 10,000 people and the units going to Novartis have about 2,000 people.

"On day one, there is a significant net influx of people to GSK, and therefore in most of our geographies - and the Delaware Valley, I suspect, will be no exception - there might be net benefit," Witty said during a conference call with reporters after the company released first-quarter financial results.

"But we are only just beginning the detail planning and all of that is subject to getting the deal cleared."

GSK is based in London, but has about 1,300 employees at the Navy Yard and about 3,200 in Montgomery County. It has other Pennsylvania facilities and one in Parsippany, N.J.

On April 22, when the deal was announced, a Novartis spokesman said it was unclear how many of the GSK employees shifting to Novartis would remain with the company, but he said growth and not cost-cutting was the aim of the acquisition. The transaction probably won't close until 2015.

Novartis is already among the leaders in selling cancer medicine. For $16 billion, it gets GSK's current cancer drugs, some of which are developed in this area. By paying $7 billion, GSK gets all but one of Novartis' vaccines to improve its position as one of the world leaders in that area. The companies also formed a joint venture to sell non-prescription medicine.

Jobs are one factor in the flurry of drug company deals that have been proposed or agreed upon recently.

New York-based Pfizer said this week it will try to take over AstraZeneca, based in the United Kingdom, for about $99 billion. Both companies have operations in this region. Pfizer has been selling non-core assets, so a big acquisition surprised some analysts, but it might only really want parts of AstraZeneca.

Pfizer CEO Ian Read said he wants AstraZeneca's cancer drugs, but he also wants to use the deal to shift Pfizer's incorporation to the UK to pay less tax than in the United States. AstraZeneca employees in Britain - and Delaware - are concerned.

California-based Botox-maker Allergan is fending off a hostile takeover bid by Canada's Valeant Pharmaceuticals. Citi Group analyst Liav Abraham said Monday in a note to clients that, as a defensive move, Allergan might try to buy Shire Pharmaceuticals, which has operations in Chesterbrook.

Merck & Co., which has a big operation in Montgomery County and is in the midst of cutting staff, reportedly has competing bidders for its consumer products division.

Witty said GSK was only "an interested observer" of the other pending deals.

"Different managers will have different time horizons, different pressures and different objectives," Witty said.


dsell@phillynews.com

215-854-4506

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