Merck Shuts Down RNAi Research Center in SF, Cutting 50 Jobs

7/29/11Follow @xconomy

Merck has decided to close down the RNA interference research facility it obtained through its $1.1 billion acquisition five years ago of San Francisco-based Sirna Therapeutics, the company said late today.

About 50 jobs are being eliminated, while about 10 people are being offered transfers to other Merck (NYSE: MRK) facilities on the East Coast and in Palo Alto, CA, says company spokesman Ian McConnell. The company still plans to utilize the RNAi technology it got via the Sirna acquisition throughout its global R&D operation, he says. Employees in San Francisco, at the facility at 1700 Owens Street in Mission Bay, were told about the shutdown today, McConnell says.

“We continue to invest significantly in the RNA research field, which we believe represents a potentially transformative technology,” McConnell says. “It’s a difficult decision,” he adds, explaining that it was driven by the company’s need to cut costs.

Merck’s acquisition of Sirna raised eyebrows across the industry from the beginning, because of the high price tag, and the early-stage nature of RNAi technology. This technology has electrified scientists for several years, because it offers the potential of hitting biological targets of disease that are currently inaccessible by conventional small-molecules or larger biotech drugs. Merck paid what many considered to be the lavish sum of $1.1 billion to acquire Sirna, one of the first movers in RNAi.

Since then, Merck hasn’t pointed to any RNAi-based drugs that have emerged in its pipeline, and it has publicly emphasized the challenge it has faced finding ways to effectively deliver these drugs in the body. Merck’s decision comes just a few months after fellow pharma giant Roche pulled out of a high-profile RNAi collaboration with Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY). There are no such RNAi-based drugs approved yet by the FDA for sale in the U.S.

Still, McConnell said Merck plans to continue to use the RNAi technology to help screen drug candidates, an effort which Merck vice president Alan Sachs described in an exclusive interview with Xconomy in January 2010. The RNA group at Merck is now headed up by Jeremy Caldwell, McConnell says.

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