WNPR

Alexion Pharmaceuticals Will Move Headquarters To Boston

Sep 12, 2017

Alexion Pharmaceuticals plans to move its headquarters out of the city of New Haven where it began as a startup. The giant company will relocate its corporate office to Boston, the third major company to announce a move from the state in the last two years, following General Electric and Aetna.

Alexion will also cut 20 percent of its workforce as part of a major restructuring. The company employs more than 800 people in Connecticut.

Alexion says it will maintain a research presence and 450 employees at the landmark building on College Street which it constructed and moved into less than two years ago.

“Alexion’s 25 year history began in New Haven, and Connecticut remains a critical part of our future," said CEO Ludwig Hantsen in a statement.

On a conference call Hantsen added, "Boston will provide access to a larger biopharmaceutical talent pool, and a variety of potential life science partners to further support development initiatives."

He said New Haven will be Alexion's Center of Excellence for research and development.

But the move comes with a price. The company will be on the hook to pay back some $26 million in financial assistance from the state of Connecticut, which it received when it moved from Cheshire to the Elm City in 2016. Alexion was a beneficiary of the state’s First Five economic incentive program, which was designed to attract and retain major employers with tax credits, grants, and low-cost loans.

Catherine Smith, commissioner of the state's Department of Economic and Community Development, said she was informed late last week that the move was being considered.

"It came out of nowhere from my perspective," she told WNPR.

She defended the state's 16 deals under the First Five banner. "This is the only one that's announced that they're actually leaving the state -- for their corporate headquarters -- but most of them have done exceedingly well."

Smith said DECD has had assurances from Alexion that taxpayer dollars will be refunded, along with an additional penalty.

"This is an example of, when you put in the right clawbacks, if they don't perform as they're supposed to, we get our money back," she said.

New Haven officials say they’re hopeful they can attract other companies to the state of the art laboratory facility.

"We are quite frankly delighted that we got to a point where the building is built. It's one of the great research buildings in the world," said Matt Nemerson, the city's economic development administrator.

He said the Boston move did not come as a big surprise to him. "We always have to look at the cup half full. We now will have some beautiful, high-tech floors that we can rent to other companies," he said.

Mayor Toni Harp echoed that sentiment in a statement issued from her office.

"The new College Street building is perfectly situated near the hospital and the Yale School of Medicine – we expect new tenants there to contribute in this growing sector of the national economy,” she said.

She also took a swipe at Alexion's new management.

"Alexion’s decision to move corporate functions and some headquarters staff to Boston – with access to a full-service airport and other essentials for an international corporation – seems intended to suit its new, Boston-based CEO and a worldwide sales force," said Harp.

In a statement, 3rd District Representative Rosa DeLauro called Alexion's decision shocking and shameful. “New Haven is home to some of the most talented and brightest minds in the world, and Alexion will be worse off for leaving, both financially and intellectually," she said.

Alexion has seen a raft of management changes over the last 9 months, as it fought allegations of inappropriate sales practices around its bestselling drug. CEO Hantsen joined the company only in March of this year.

The company develops therapies for ultra-rare diseases.