Astra Zeneca Job Losses and Closings: The Impact on Delaware’s Healthcare Industry

As reported by the News Journal, Astra Zeneca is pulling over 1,000 jobs out of Delaware and demolishing its labs on Route 202.  Here is a quick hit from the Morris James Healthcare Industry Team on the issues this raises for Delaware’s healthcare industry. Intellectual Property: "Astra Zeneca's business decision demonstrates the impact of federal patent law at the local level.  Expiration of many of Astra Zeneca's current drug patents and fewer new drugs in the pipeline that are patent eligible is likely a driver in the business thinking here." Kenneth L. Dorsney, Esq. Intellectual Property

Government Relations: “My colleague Ken is right, the Delaware healthcare industry has to continually engage and support its Congressional delegation to evaluate the impacts, intentional and unintentional, of intellectual property legislation on Delaware’s healthcare industry.”

Cleon L. Cauley, Sr., Esq.

Government Relations

Zoning and Land Use: “I’m concerned this will create political headwind for important investments in infrastructure needed to attract future jobs to Delaware.  Yet states fail to attract great jobs without those investments.  The planned demolition of the labs raises the question of whether government condemnation power could be used to prevent that result if there is no deal.  Given the age of the buildings, a 9 month hold on any demolition permit could be used under the County Code to make time for negotiations.”

A. Kimberly Hoffman, Esq.

Land Use

Tax and Business: “It’s difficult to gauge the tax effects of razing two 50+ year-old buildings in the context of a large multi-national company that’s apparently experiencing losses and downsizing worldwide.  From an overall business standpoint, I’m sure the company concluded it made sense to “stop the bleeding” on maintenance of antiquated facilities no longer needed in their operations, especially when the buildings would require significant capital expenditures in their current state to make them useful for any foreseeable purpose down the road.  While a cash flow savings, it is not the cash-raising event that the company’s anticipated sale of three ancillary buildings outside the campus itself will produce.”

Bruce W. Tigani, Esq.

Tax, Estates and Business Practice

Employment Law: “Employees and management in large-scale layoff situations ideally receive careful legal guidance to navigate through existing employment contracts, post-employment restriction agreements, severance policies and agreements, pension rights and obligations and healthcare continuation concerns.  Earlier is better in addressing these issues.”

James H. McMackin, III, Esq.

Employment Law