Shire to move U.S. HQ, 500 jobs from Philly area to Boston: UPDATE
Boston a bigger biotech center?
Shire Plc, the drugmaker that popularized Adderall for attention-deficit and hyperactivity disorder (ADHD), plans to move its U.S. headquarters and more than half the 970 jobs at its Chesterbrook offices near Valley Forge to the Boston area, workers were told in a meeting this morning.
The company, incorporated in the British tax haven island of Jersey, employed 1,100 plus 300 contractors at Chesterbrook as recently as 2012, and previous CEO Angus Russell had considered local sites for a larger Philadelphia-area campus. But current CEO Dr. Flemming Ornskov, killed those plans; Ornskov, who holds a master's in public health from Harvard, prefers the Boston area. "Our strategy is to become a leading biotechnology company, and Boston is a biotech center," spokeswoman Gwen Fisher told me.
Shire plans to move 500 staff -- executives, research and development staff and the gastroinestinal, internal medicine and neuroscience business groups -- to Lexington, Mass., near the company's infectious-disease unit. Legal and some other corporate support functions will also move, Fisher said. Supply chain, government contracting, and parts of the human-resources and information-technology groups will stay in Chesterbrook. Shire statement here.
Shire won't say how many staff or contractors will likely remain in its site at Chesterbrook Corporate Center, which is owned by Pitcairn Properties. But it told investors it hopes to save $25 million a year from the consolidation, implying some jobs will be eliminated. In the statement, Shire said it "plans to move employees in several phases beginning in the first quarter of 2015 and targets completion by the first quarter of 2016."
Shire, which purchased Exton-based "orphan-disease" drugmaker ViroPharma earlier this year, was the subject of an abortive, tax-driven, $54 billion takeover offer by drugmaker AbbVie earlier this year, also said acting chief financial officer James Bowling is leaving the company effective Feb. 20, to be replaced by Shire's investor relations chief, Jeff Poulton.
Shire is at least the second global drugmaker to cut back its Philadelphia-area U.S. headquarters and move jobs elsewhere recently. AstraZeneca last year scaled back its Fairfax, Del. office complex on U.S. 202 and moved people to Waltham, Mass., and to Gaithersburg, near Washington, D.C. AstraZeneca this year agreed to sell the vacant southern half of the Fairfax complex to JPMorgan Chase & Co., which employs more than 7,000 in the Wilmington area.
What impact will Shire's cutbacks have on Tredyffrin, Chester County's most populous community? "We'll be sorry to see people leave," Michael Heaberg, chairman of Tredyffrin Township's elected board of supervisors, told me. Shire "has been very supportive of community activities."
But Heaberg also said he expects other tenants will move into any vacant space, noting the nearby Cross Point office building, open last year, has filled with tenants moving from higher-tax communities like Radnor Township.
Heaberg's own firm, $700 million-asset Axiom Asset Management, moved from Radnor to CrossPoint in part because Tredyffrin's lack of a business-privilege tax or earned-income tax "saved us $5 per square foot compared to Radnor," he told me.
Tredyffrin is one of the suburban office centers where planners and tax collectors have worried in recent years about rising vacancies at aging buildings. But Heaberg says the township has acted to make it easier for redevelopers to mix residential, retail and office uses in locations like CrossPoint, and other properties that need updating.
For example, Heaberg noted that developer Bob Whalen and Valley Forge Investments are converting two-thirds of the Chesterbrook Shopping Center, which has been more than half vacant, into at least 100 half-million-dollar homes.