Bloomberg News
Now that Shire is no longer going to become part of AbbVie , the drug maker has returned to making plans for the future. And in its first big move, Shire is shifting U.S. headquarters, 500 jobs and some of its most important operations from suburban Philadelphia to the greater Boston area.
Shire, which is best known for selling ADHD pills such as Adderall XR, will move all of its RD and commercial operations from Chesterbrook, Pa., to Lexington, Ma., which will become its new U.S. headquarters, according to a statement. Global operational headquarters remains in Switzerland.
The move, which will save about $25 million annually starting in 2016, reflects an ongoing pivot toward Massachusetts among drug makers and biotechs, which seek to tap the extensive network of academic medical centers as well as venture capitalists that have attracted others companies to the region.
“As we’ve evolved, we’re becoming more biotech-y in our approach,” Shire ceo Flemming Ornskov tells The Boston Globe. “We think that being in the cluster of the greater Boston area will help us. What has happened over the past decade is this has become the mecca for life sciences in the U.S.”
Indeed, the Boston environs are now home to several operations run by large drug makers, including Pfizer, Novartis, Amgen and the Genzyme unit of Sanofi . In fact, before he was ousted, former Sanofi ceo Chris Viehbacher moved from France to Boston to tap into the local scene.
Shire currently employs 1,352 people in Lexington and 971 in Chesterbrook, along with about 300 contractors. An unspecified number of the Pennsylvania employees will be offered the chance to relocate, but a spokeswoman says it is too soon to say how many layoffs will occur. Other than Ornskov, most of the Shire executive team is based in Lexington, the spokeswoman says.
The moving fees and expansion plans will be easier to pay for thanks to a $1.6 billion break-up fee from AbbVie, which last month walked away from a $52 billion deal to buy Shire after the Obama administration changed tax rules. AbbVie was pursuing a tax inversion, which involves lowering its corporate tax rate by purchasing an overseas company. Shire is domiciled in Ireland, where corporate tax rates are much lower than in the U.S.
[UPDATE: The shift comes 10 years after Pennsylvania officials lured Shire to open U.S. headquarters with at least $5 million of tax credits and other economic incentives. A spokesman for Pennsylvania’s economic-development department tells our colleague Peter Loftus that it’s disappointed in the move, but notes the drug maker exceeded job creation and investment requirements tied to the previous aid. State officials met with Shire early last year to discuss potential state assistance and support to help maintain and grow operations in Pennsylvania.]
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