The concentration of pharmaceutical companies in New Jersey, US, enables easy collaboration, writes Bea Perks

The concentration of pharmaceutical companies in New Jersey, US, enables easy collaboration, writes Bea Perks

The US state of New Jersey is at the heart of the US pharmaceutical industry, which accounts for over half the worldwide pharmaceuticals market. Three quarters of the world’s leading pharmaceutical companies have their corporate and/or R&D headquarters dotted along the Northeast corridor between New York and Philadelphia, traversed by the mighty 14-lane superhighway, the New Jersey Turnpike.

New Jersey has the highest per capita number of scientists, engineers and technicians in the US. The pharmaceutical industry contributed $23.8 bn (?12.2 bn) in business sales to the state’s economy in 2003, according to a report by the HealthCare Institute of New Jersey, the industry’s trade association. The industry supports about 156 000 jobs - 63 000 direct and 93 000 spin-off jobs - with a payroll impact of $6bn. But the impact of the industry on the state goes well beyond these employees.

Even so, it came as a surprise on the day the New Jersey papers were plastered with front-page headlines detailing the resignation of the state governor, James McGreevey, amid a homosexuality scandal in August 2004, to hear a local taxi driver discussing the current financial insecurity overshadowing Schering-Plough. The performance of the industry affects everyone.

Pharmaceutical giant Schering-Plough, with headquarters in Kenilworth, New Jersey, has had a tough time of it recently, following a net loss of $92 million in 2003. Its hopes are now pinned on a new cholesterol-reducing drug approved by the US Food and Drug Administration (FDA) last summer.

The drug, marketed as Vytorin in the US and Inegy in Europe, stands as a fine example of the benefits of the company’s geographical location.

Vytorin was co-developed by Schering-Plough and neighbours Merck, whose headquarters are just south of Schering in Whitehouse, New Jersey. The development of the drug, which incorporated two existing drugs - Schering-Plough’s Zetia (which reduces cholesterol absorption in the gut) and Merck’s Zocor (which reduces cholesterol production by the liver) - called on very close scientific and marketing collaboration between the two companies.

Staff working on the project recall frequent trips back-and-forth between the companies HQs. The ease with which the two teams could meet each other face-to-face, to discuss what their data meant and how to build on this, was key to the collaboration.

’We’ve had collaborations with other companies before,’ says Rosemarie Yancosek, head of corporate communications at Schering-Plough. ’Other drugs have been co-marketed but this is the only joint venture on this scale.’ In fact, the collaboration led to the creation of a third entity: ’Merck/Schering-Plough’, though the companies are keen to point out this is not a merger.

Schering made the strategic decision to get involved in the cholesterol reducing area in 1988. ’Think about the timing of that,’ says John Clader, a medicinal chemist who worked on the early development of Zetia. ’In 1987, [Merck’s] Mevacor, the predecessor to Zocor, was approved and marketed; the first statin drug on the market.’ Nobody knew at the time how big that class of drug would be. Now, the best-selling drug in the world is a statin called Lipitor, with expected worldwide sales of $10bn in 2004.

Lipitor is produced by the world’s largest pharmaceutical company, Pfizer, with corporate headquarters not in New Jersey, but not far away, just north in New York City. The world’s second-best-selling drug is Merck’s statin, Zocor, with estimated worldwide sales of just over $6bn, according to US healthcare information firm IMS.

Schering made the decision early on not to, as many other companies had, make yet another statin. Cholesterol arrives in the body from two sources: internal, the body makes its own; and external, absorbed from food. Statins cut down the body’s natural cholesterol production, so Schering’s team focused on cutting down cholesterol absorption.

Early signs for the drug that combines both the drug that Schering-Plough finally came up with, Zetia, and Merck’s Zocor, are encouraging. ’People are queuing up for it’, says Clader. So, does Vytorin offer the most effective route to cholesterol reduction? ’It’s more effective than Lipitor,’ grins Clader. ’That’s the most important thing’.

Merck/Schering-Plough’s hopes of chipping in on Lipitor’s $10bn top spot were boosted recently with a multi-centre trial suggesting that, in some patients at least, Vytorin is more effective than Lipitor at reducing low-density lipoprotein (LDL) cholesterol levels (See Chemistry World, June 2004, p14).

’[Schering-Plough] is anticipating that this is going to be the primary drug for us for the next couple of years,’ said Clader.

Alongside Schering-Plough and Merck, New Jersey is home to the headquarters of an illustrious crowd, from Johnson & Johnson and Bristol-Myers Squibb to Wyeth, and Lucent Technologies, among others. But being a world-leader is certainly no excuse to rest on your laurels, as Schering-Plough knows only too well. And New Jersey knows it too, proving itself a hot-bed of innovation, with new companies, particularly in biotech, starting up at a bewildering rate.

State governor McGreevey, before he left office, signed an executive order creating so-called Innovation Zones - three industry clusters centred on New Jersey’s research universities. Direct state grants and tax incentives will favour high-tech start-ups in those zones, which surround and include the campuses of the New Jersey Institute of Technology, Rutgers University, and the University of Medicine and Dentistry of New Jersey. Surprisingly, Princeton, New Jersey, where Einstein spent 20 years working on the relationship between gravitation and electromagnetism, is not included.

State-commerce official Virginia Bauer, chief executive officer and secretary-designate of the New Jersey Commerce and Economic Growth Commission, says she wants to change that. Princeton’s partnership with New Jersey ’has really never been fully realised,’ said Bauer at a meeting with the business community early in 2004. Making Princeton a fourth Innovation Zone could help, she argues.

New Jersey’s position at the centre of the worldwide chemical and pharmaceutical industries looks safe for now, but competition - particularly from China - cannot be ignored. Schering-Plough already contracts research work out to China, a country where critical products can be produced to equally high standards at considerably reduced cost.

But such arrangements could be good news on both sides of the equation. Despite recent figures, Schering-Plough has high hopes, and plans for imminent expansion once Vytorin has shown its colours.

Further Reading

  • Healthy opportunities: New Jersey and the pharmaceutical and medical technology industry, April 2004, executive summary of the economic study conducted by Deloitte & Touche LLP for the HealthCare Institute of New Jersey:
  • The New Jersey Economic Development Authority        

New Jersey

  • Population: 8 638 396 (2003 figures)
  • Land area: 7417 square miles
  • Population in labour force: 4 204 393 (2003 figures)
  • Employees in pharma industry: ca 63 000*
  • Share of the US pharmaceutical industry: 75 per cent (according to James McGreevey, ex-state governor for New Jersey, April 2003)
  • Contribution to the state economy in 2003: $23.8bn    

New Jersey pharmaceutical and medical technology sector

Altana Pharma US
Florham Park
Employees: 8200 worldwide
Sales: $683m (?350.7m) global
The North American subsidiary of German-based Altana Pharma. About 90 per cent of sales are from drugs for gastrointestinal indications and respiratory diseases

Aventis Pharma US
Employees: 69 000 worldwide
Sales: € 16.79bn (?11.5bn) global
Part of the Sanofi-Aventis Group, the third largest pharmaceutical company globally, biggest in Europe. Sanofi-Aventis focuses on seven therapeutic areas: cardiovascular disease, thrombosis, oncology, diabetes, central nervous system, internal medicine, vaccines

Franklin Lakes
Employees: 25 000 worldwide
Sales: $4.935bn global
BD (Becton, Dickinson and Company) is a medical technology company serving healthcare institutions, life science researchers, clinical laboratories, industry and the general public. It manufactures and sells a broad range of medical supplies, devices, laboratory equipment and diagnostic products

Employees: 2500 in US
Sales: US \>$1bn
US affiliate of Germany’s Schering, the world’s largest maker of diagnostic/imaging agents and oral contraceptives

Bristol-Myers Squibb
Eight sites in New Jersey
Employees: 53 000 worldwide
Sales: global $16.7bn
BMS has five business segments: pharmaceuticals, consumer medicines, nutritionals, medical devices, and beauty care

CR Bard
Murray Hill
Employees: not available
Sales: not available
Develops products that focus on disease state management in three key areas: vascular, urology, and oncology (equipment rather than drugs)

Employees: not available
Sales: $2.3bn global
A wholly owned subsidiary of Japanese pharmaceutical company Eisai

GE Healthcare Bio-Sciences
Employees: \>42 500 worldwide
Sales: Not available
Formerly Amersham, now part of GE Healthcare, a $14bn unit of General Electric Company headquartered in the UK

Hoffmann-La Roche
Employees: 65 000 worldwide (3000 in NJ)
Sales: $23.4bn global
US pharma headquarters of the Swiss-based Roche Group, a leading international research-oriented healthcare company with principal businesses in pharmaceuticals and diagnostics.

Johnson & Johnson
New Brunswick
Employees: 109 200 worldwide (50 000 US)
Sales: $41.9bn global
Broad-based manufacturer of health products and supplier to pharmaceutical and diagnostic markets

Rahway and Whitehouse Station
Employees: 45 000 worldwide
Sales: $22.5bn
Research-driven pharmaceutical company with a wide range of products.

Novartis Pharmaceutical
East Hanover
Employees: 10 000 worldwide (3600 New Jersey)
Sales: $6.6bn
A division of Novartis, formed in December 1996 by the merger of Ciba-Geigy and Sandoz. Researches, develops, manufactures and markets prescription drugs

Novo Nordisk
Employees: 20 000 worldwide (1400 in NJ)
Sales: $4.03bn
Focused healthcare company and a world leader in diabetes care. It has a strong presence in New Jersey

Pfizer Consumer Healthcare
Morris Plains
Employees: 3500 worldwide
Sales: $3bn global
Products from Pfizer’s Warner-Lambert Consumer Group in New Jersey include cold and allergy relief and skin care

Nine sites in New Jersey
Employees: 30 500 worldwide
Sales: $8.3bn global
Core product groups include allergy/respiratory, anti-infective/anticancer, dermatologicals and cardiovasculars

Some of the largest pharmaceutical and medical technology firms in New Jersey, with sales and employee figures where available