Genaissance lays off 10 percent of its city workforce



Genaissance Pharmaceuticals, Inc., one of the leading biotechnology industries in New Haven, laid off 18 employees this week, 17 of whom worked at the company’s Science Park headquarters.

Executive Vice President and Chief Technology Officer Gerald Vovis said this 10 percent reduction of its workforce is not an indication of a downturn in New Haven’s biotechnology boom but represents a realignment of the company’s operating structure. The majority of the job cuts occurred in the research and development sector.

“Any industry goes through cycles of growth and contraction depending on what is going on in the general economy, and we’re certainly not immune to that,” Vovis said. “But there will always be a need for biotechnology, and I am confident that it will continue to prosper in New Haven.”

Genaissance was founded with the hope of developing the technology to help health care providers choose the most appropriate drugs and treatments for patients. The company’s founders opened a small office in 1997 in Science Park — New Haven’s emerging biotechnology sector — which has now expanded to cover 64,000 square feet and contains two state-of-the-art labs as well as administrative offices.

Vovis said New Haven was an ideal spot to locate the company for a number of reasons. Other biotechnology companies had already sprung up in the community, and the city is conveniently located between two important bioscience centers in New York and Boston. New Haven also offers a strong educational system and a more reasonable cost of living than many other biotechnology centers.

“The mayor is very conducive to making things work for biotechnology in New Haven, so you really have everything in place here,” Vovis said.

Paul Pescatello, the president and chief executive officer of CURE, the organizational center for Connecticut’s BioScience cluster, said the layoffs at Genaissance are consistent with the general blows to Connecticut’s economy, particularly its technology sector, in the past few years.

But Pescatello said he expects 2004 to be a good year for the Connecticut biotechnology industry, which has already raised $429.25 million to date. He attributed this success to the strength of the core research and development being done by Connecticut’s biotechnology companies, as well as the management acumen of the companies’ leaders.

“That we have had such success raising capital and have not really lost any companies is very different from other biotech clusters such as North Carolina, Cambridge and San Diego,” Pescatello said.

Despite the layoffs at Genaissance, the biotechnology industry has also witnessed recent growth in New Haven, including the opening of HistoRx and the relocation of Ziopharm from New York City to New Haven. Moreover, next year will see the opening of Yale’s new Chemistry and Engineering building and Pfizer’s new clinical research unit.

Associate Vice President of New Haven and State Affairs Michael Morand said all of these new developments will strengthen the foundation for economic growth in New Haven’s community.

“The biotechnology cluster in New Haven is solid and growing,” Morand said. “A modest restructuring by one company is not cause for any great worry.”

Genaissance expects to take a charge of approximately $400,000 in the fourth quarter for severance obligations. Each laid off worker received severance pay and outplacement services.

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