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The Rosetta Diaspora: Genetics Talent Stays Close to Home After Merck Shuts Down in Seattle

Merck was the only Big Pharma company with a toehold in Seattle a year ago, so when it decided to shut down its Rosetta Inpharmatics research center last October as part of global cost-cutting, some local biotechies moaned about how this was another sign of the apocalypse for a once-thriving life sciences scene.

But after almost a full year, the picture is more clear: Merck’s closure of Rosetta didn’t hurt the Northwest as much as many people thought at first, and it might even spur more innovation.

Rosetta has long held symbolic importance to Seattle biotech, because it was one of the region’s big biotech success stories of the 1990s before it was bought by Merck for more than $620 million in 2001. Merck spent gobs of money building it a shiny new Vulcan facility in South Lake Union, and trying to integrate Rosetta’s cutting-edge genetic analysis tools throughout its global research centers. The hope was to give scientists a better idea of which drugs were likely to succeed or fail in clinical trials, and to determine which patients might respond differently from others. About 300 people worked there at the peak when the closure was announced last fall.

Where has all of this genetics talent gone? Merck wanted to recruit about 100 people to its research centers on the East Coast, and about 70 people accepted those offers, says Doug Bassett, Merck’s executive director of molecular profiling and head of the Seattle site which is still winding down. But an even larger number, about 110 people, have remained in Seattle to carry on work related to what they did at Rosetta in other organizations. That certainly leaves some people who lost their jobs and may or may not have landed on their feet, but it’s clear that many Rosetta alumni, maybe even a majority, will continue to contribute to the local life sciences cluster.

“What started with a perception of a shutdown of a site has been translated into the sowing of seeds for new research that can grow,” says Bassett.

The Rosetta talent pool has branched out into in three main places here locally.

—The largest group of Rosetta alums, about 75 people from the Gene Expression Laboratory, are going to work now for Covance, the giant contract research organization (NYSE: CVD). The CEO of that Princeton, NJ-based company, Joe Herring, told me in an exclusive interview in late July that it will be “a shame” if Covance can’t double or triple the growth rate of Rosetta’s genetics service over the years, basically because it plans to offer the service to many more global drugmakers besides just Merck.

—About 20 people from Rosetta’s Biosoftware division have gone to work for Microsoft and Ceiba Solutions, to support Microsoft’s Health Solutions Group, as it beefs up its life sciences software offerings this year. Some of these workers have joined Cambridge, MA-based Ceiba, which is building more capability in Seattle, to provide support for the software, Bassett says.

—Another 15 people have joined Rosetta’s co-founder, Stephen Friend, at a fledgling international genomics nonprofit called Sage Bionetworks in Seattle. We broke the story in March that Friend had secured $5 million in committed donations to get this off the ground, and he recently provided an update about how he’s getting started at the Fred Hutchinson Cancer Research Center.

Merck considered spinning off some of these operations into venture-backed companies, but ultimately chose to offload the biggest pieces of the Rosetta operation to Covance, Microsoft, and Sage, Bassett says. In all three cases, Merck is maintaining ongoing business relationships with the people who used to work at Rosetta, Bassett says.

How much this will benefit Seattle depends largely on whether Covance can live up to its CEO’s growth projections; whether Microsoft can convince biologists they need serious software upgrades; and whether lightning will strike a second time for Stephen Friend.

“This transition has been good for Merck and it can be good for Seattle through creating new opportunities for our former team members,” Bassett says.

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

    From 9-10 am today, I’ll be at Uptown Espresso on Westlake and Republican St near Rosetta. So if anybody wants to pass along any pieces to the story I may have missed, tell me I’m full of beans, or just say Hi, I’d love to chat.

    Luke

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

    One former Rosetta employee who wrote to me directly has a different take, saying the Rosetta shutdown turned out worse than expected. That’s because the Rosetta Biosoftware group had 55 employees, and only about 20 were retained by Microsoft and Ceiba, while Sage was expected at one point to take on 30-40 people. A few Rosetta alums have snapped up jobs in academia, at Amgen, and Novo Nordisk, but that still leaves quite a few who are unemployed or underemployed.

  • KnowledgeMan

    I would agree that the spin from Doug is exaggerated. There are many good people that must fend for themselves as a result of the Rosetta site closure. It is hardly a positive event in the Seattle biotech community.