Merck Closing Seattle’s Rosetta Research Center, Cutting 300 Jobs

10/22/08Follow @xconomy

Merck is leaving Seattle, and cutting 300 local jobs. The Whitehouse Station, NJ-based drug giant said today in its third-quarter earnings report that it is shutting down its Rosetta Inpharmatics research site in Seattle’s South Lake Union neighborhood as part of a global cost-cutting plan to eliminate 7,200 jobs and save as much as $4.2 billion over the next five years.

The shutdown marks the end for one of Seattle’s most promising biotech companies of the late 1990s. Rosetta was founded in 1996 by Institute for Systems Biology president Leroy Hood, Fred Hutchinson Cancer Research Center president Lee Hartwell, and “Hutch” researcher Stephen Friend. The company was sold for more than $620 million to Merck in July 2001, and a year later Merck decided to move the Kirkland, WA-based company to become one of the early biotech tenants to support Paul Allen’s vision for growth in South Lake Union, as described in this story I wrote for The Seattle Times.

It’s ironic that Merck says it’s dumping Rosetta now because it needs to cut costs. When it bought Rosetta’s technology in 2001, it integrated it throughout the company, to make the parent more efficient. Rosetta’s technology was used to analyze which genes are switched on and off in diseased tissues, giving scientists a better idea of where to aim potential new drugs, and which patients might respond differently than others. The new technology was supposed to help Merck decide which drugs to shelve, and which to move forward, to improve upon the dismal 1-in-10 industry success rate for drugs that enter clinical trials.

Merck CEO Richard Clark insisted in today’s release that the company is committed to “fully funding innovative R&D” even though its lack of R&D productivity is one of the big reasons it’s being forced to cut costs.

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  • Pat G Rogers

    Luke — Do you know if Governor Gregoire is planning to address our depressed biotech industry when she speaks at WBBA’s annual meeting?

  • http://www.xconomy.com/author/ltimmerman/ Luke Timmerman

    I don’t know what the Governor plans to say, but this sounds like a good question to raise if there’s any time for Q&A.