Astellas Pharma Inc. jumped on the bandwagon of big pharma restructurings, disclosing plans to close U.S. units OSI Pharmaceuticals LLC and Perseid Therapeutics LLC this year and to downsize Astellas Research Institute of America LLC to focus on central nervous system therapies. The company also plans to terminate its in-house fermentation research and, by fiscal 2015, to fold the operations of its Kashima facility in Osaka into other sites, including its Tsukuba (Japan) Research Center.

Last year, Astellas closed U.S. subsidiary Urogenix Inc., of Durham, N.C., a research facility focused on urology drug discovery that was acquired in 2006 from Dynogen Pharmaceuticals Inc., also transferring those functions to Tsukuba. This time, the belt-tightening will extend even to the Japanese pharma's internal operations. In April 2014, Astellas said clinical development, quality assurance, regulatory affairs and pharmacovigilance functions – all currently located in Itabashi-ku, Tokyo – will be "relocated and consolidated" closer to the company's headquarters in Nihonbashi, Chuo-ku, Tokyo.

Astellas was mum on the number of jobs affected in the U.S. and Japan, but the company said the moves – designed "to reallocate resources and realize operational excellence" – are expected to result in extraordinary losses of approximately ¥11 billion (US$107.6 million) in the fiscal year ending in March 2014.

A report by the Long Island, N.Y.-based Newsday said the closing of OSI in Melville, N.Y., would cost 115 jobs.

As part of the restructuring, the pharma said it will establish Astellas Innovation Management (AIM) in October to enhance the process of screening external opportunities and strengthen innovation during preclinical development. That move likely will bring additional job cuts, as screening activities currently are handled by multiple departments, including Astellas Venture Management LLC, which will be integrated in AIM.

Astellas also said it will develop a "fast-track" research process for high-priority projects and an "ex track" for external, expedited or exploratory projects that require greater flexibility to move to proof of concept.

The reallocation of R&D functions is designed to rely more heavily on external resources, undertake initiatives in new therapeutic areas and technologies such as regenerative medicine and vaccines and accelerate the development of preclinical assets while ensuring sufficient investment in its late-stage clinical pipeline, according to a company statement.

Astellas is hardly the first pharma to slash jobs in the name of R&D efficiency. Last spring, Merck KGaA, of Darmstadt, Germany, disclosed plans to close the Geneva headquarters of Merck Serono SA as part of a comprehensive plan to increase competition in key product areas and reduce organizational inefficiencies. The closure resulted in the elimination of some 500 positions and the relocation of hundreds more to other Merck facilities, with Merck Serono's executive functions moving to the Merck headquarters and key R&D positions relocating to Darmstadt, Boston and Beijing. The move prompted an uproar in Switzerland despite work concessions and the spawning of a handful of biotech start-ups. (See BioWorld Today, June 20, 2012.)

In March, AstraZeneca plc took the ax to its R&D operations, disclosing plans to relocate 2,500 employees and cut another 1 ,600 jobs, mainly in the UK and U.S., as it consolidates discovery and development in Cambridge, UK; Gaithersburg, Md.; and Mölndal, near Gothenburg, Sweden. (See BioWorld Today, March 19, 2013.)

Earlier, the company shut down its Montreal neuroscience research center, eliminating 132 positions as part of a global R&D restructuring, following similar closures by Sanofi SA, of Paris, and Merck & Co. Inc., of Whitehouse Station, N.J. (See BioWorld Today, Feb. 3, 2012.)

In all, pharmaceutical companies collectively jettisoned 150,000 jobs worldwide over the past three years, according to a report earlier this year by PwC's Health Research Institute. (See BioWorld Today, Feb. 8, 2013.)

Founded in 1983 as Oncogene Science Inc., OSI developed cancer drug Tarceva (erlotinib) in partnership with Genentech Inc., now a unit of Roche AG, of Basel, Switzerland. The blockbuster drug was approved by the FDA in 2004 in locally advanced or metastatic non-small-cell lung cancer (NSCLC) after failure of at least one prior chemotherapy regimen. In 2005, the drug won the FDA's nod as first-line therapy in pancreatic cancer and, in 2010, as maintenance therapy in NSCLC. (See BioWorld Today, Nov. 22, 2004, Nov. 4, 2005, and April 10, 2010.)

After failing in a hostile takeover bid, Astellas paid $4 billion for OSI in a friendly 2010 buyout. At the time, OSI boasted a U.S. sales force, a pipeline of small molecules and early stage discovery capabilities. Among its assets were OSI-906, an insulin-like growth factor-1 inhibitor in Phase III for adrenocortical carcinoma and Phase II for ovarian cancer; OSI-027, an mTOR inhibitor in Phase I; OSI-930, a dual inhibitor of c-Kit and VEGFR-2 in Phase I; and early stage programs for diabetes and obesity. (See BioWorld Today, May 18, 2010.)

The following year, Astellas snagged Perseid for $76 million by exercising an option to buy out the equity interest of a joint venture partner, Maxygen Inc. The companies had forged the joint venture in June 2009, and Perseid began operations in September 2009 to discover and develop protein pharmaceutical programs, including CTLA-4 Ig (Astellas ASP2408) in rheumatoid arthritis and other autoimmune indications. (See BioWorld Today, Sept. 22, 2008, and March 18, 2011.)