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July 18, 2017 01:00 AM

Takeda shrinks its HQ workforce in suburban Chicago as it adds in Boston

Brigid Sweeney
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    Takeda Pharmaceuticals, a Japanese drugmaker with U.S. headquarters in suburban Illinois is finishing a major reorganization that has forced hundreds of Chicago-area executives to relocate to the Boston area and slashed hundreds more field sales jobs across the country. It's also attempting to sublease one of three buildings on its 70-acre Deerfield corporate campus, built in the mid-aughts. The moves come as the company tries to jumpstart growth by focusing on cancer and other specialty drugs rather than primary-care pharmaceuticals.

    A Takeda spokesman will not confirm the number of employees who currently work in Deerfield, saying only that the company employs 5,000 people across the U.S. According to sources, at least 2,150 of those employees are now based in Boston and Cambridge, Mass., where a massive biotech hub has blossomed.

    Over the past two years, Takeda has also gradually moved its global research and development and vaccine business units, which were headquartered in Deerfield, to Cambridge.

    As many as 600 Deefield-based R&D employees and 150 vaccines employees were required to relocate as a result, sources say. A spokesman declines to confirm that number or say how many employees made the move. Separately, in March, Takeda axed 480 sales people and managers in field offices around the country. Fewer than 10 were based in the Chicago area, the company says. The affected employees worked with Takeda's primary care business, which include drugs that treat gastrointestinal problems. That unit is being pruned in order to divert more resources to oncology, which executives believe has a potentially more lucrative future.

    BOSTON BOUND

    The sales layoffs were also prompted by a sea change in medical operations. Whereas many doctors used to operate their own private practices in small offices scattered around a city, today many physician-run practices have been acquired by large hospital systems. The doctors now work out of their employers' centralized buildings. Regulations that govern pharmaceutical sales reps' relationships with doctors have also tightened. As a result, fewer sales people are required to cover a territory.

    The shift to Boston reflects a global consolidation in business operations and the need to be close to the nation's top biotech talent. Takeda first established a presence in Cambridge in 2008, when it purchased Millennium Pharmaceuticals for $8.8 billion. The smaller Cambridge-based company, which manufactures a type of chemotherapy used to treat the blood cancer multiple myeloma, changed its name to Takeda Oncology in 2013. In January, Takeda acquired another Cambridge-based cancer drug maker, Ariad, for $5.2 billion.

    "We are committed to our Deerfield location as it is home to our commercial organization, the largest of the three business units," the company said in a statement. "In addition to our sales and marketing teams, medical affairs and clinical operations teams also work out of the Deerfield site."

    FADING FIREPOWER

    The changes come under the direction of Christophe Weber, who in 2015 was named CEO of the Japanese company, one of the oldest in the world. A Frenchman who previously worked for GlaxoSmithKline, Weber is the first non-Japanese executive—and only the second person outside the Takeda family—to run the company since it was founded in 1781. (The firm's history actually goes back more than 1,000 years to imperial Japan, when the Takeda clan ruled the mountainous region west of Tokyo. In 1781, a family member began selling traditional Japanese and Chinese medicines, creating what is today Japan's largest pharma company by revenue.)

    Takeda, which posted 2016 sales of more than $15.3 billion, has struggled in recent years as some of its best drugs have gone generic and its pipeline remains fairly empty. In 2011, it lost patent protection of Actos, its best-selling type-2 diabetes drug and as a result laid off about 1,600 people, including about 500 in Deerfield. The patent for Velcade, the chemotherapy drug acquired in the Millenium deal that rakes in north of $1 billion a year, is set to expire at the end of 2017. Another blockbuster, Dexilant, which used to treat heartburn, will go generic in 2020.

    Meanwhile, the cost to bring a new drug to market continues to climb and competition intensifies. In 2014, Astellas, a fellow but much younger Japanese company that also has U.S. headquarters in neighboring Northbrook, Ill., surpassed Takeda in market capitalization. (Takeda has since regained its lead.)

    Takeda established Chicago-area ties in 1977, when it created a joint partnership with Abbott Laboratories, TAP Pharmaceuticals, to market its drugs in the U.S. Takeda established its own U.S. operations in 1998 and ended the relationship with Abbott in 2008.

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