MPI cuts back but will hike staff levels by year-end

The preclinical and early clinical development services company - based in Southwest Michigan - provides toxicology, bioanalytical and analytical studies, pharmacology, pathology and molecular imaging, amongst other things, and is currently ranked number three in the US marketplace behind Covance and Charles River Laboratories.

In April MPI agreed to take over two buildings in Kalamazoo donated to Michigan state by Pfizer. The Kalamazoo offices are earmarked for MPI’s discovery services business, which are growing fast against a boom in preclinical outsourcing across the drug industry.

Preclinical work is now being outsourced at double the rate that it was ten years ago and the $4.1bn preclinical services market has been growing at an annual rate of 15 per cent.

But MPI says it is seeing the effects of the credit crunch, with smaller drug development organisations scaling back the number of compounds they are taking into clinical trials, according to chief operating officer Bill Harrison, cited in the Kalamazoo Gazette.

The takeover of the Pfizer facilities was agreed back in April and was part of a $330m expansion initiative that will also see MPI add capacity at its main site in Mattawan and could lead to the creation of 3,300 new jobs over the next five to seven years.

The state lured the CRO with tax breaks valued at $86m over the next 15 years, but the token sale of the units – for $2 – has to be completed before the end of the year for the tax concessions to remain valid..

Ahead of the layoffs the company has around 1,600 employees, but expects to be around the 1,500 level at the end of this year. Employees will start moving into the new buildings in early 2010, said Harrison.