GSK Plans Further Restructuring in R&D

GlaxoSmithKline (GSK, London) Chief Executive Andrew Witty outlined the company’s strategic priorities for 2010, which include further diversification into emerging markets, consumer healthcare, and vaccines. The company also will restructure its research and development (R&D) activities.

GSK reported turnover of £28.4 billion ($44.2) billion in 2009, and its pharmaceutical sales increased only 2% to £23.7 ($37.2 billion). The company estimated that it lost more than £1.4 billion ($2.2 billion) in pharmaceutical sales to generic-drug incursion in the US market in 2009. Because of this assessment, the company sees continued value in diversification in areas such as emerging markets and consumer healthcare to offset some of those losses. GSK's pharmaceutical sales in emerging markets grew 20% in 2009 and now represent 10% of the company’s group turnover, Witty said. The company's consumer-healthcare sales increased 7%.

Part of the company’s strategy is to reduce R&D infrastructure costs. The company will expand its restructuring program to deliver an additional pretax savings of £500 million ($785 million) by 2012, of which a significant portion will be generated through the reduction of the R&D infrastructure. The company will not be providing targets for job reductions and “we will announce restructuring outcomes once employees, relevant works councils, and trade unions have been consulted,” according to a company press release.

GSK also will cease research in certain therapeutic areas, including select neuroscience areas, such as depression and pain, and instead focus on neurodenegenerative and neuroinflammatory disease such as Alzheimer’s disease, multiple sclerosis, and Parkinson’s disease.

The company also wants to increase its number of external partners in drug discovery. The company estimates that approximately 30% of its discovery research is now outsourced to 47 external partners. The company is interested in increasing the level of externally sourced compounds through more option-based agreements.

GSK also plans to start a new stand-alone unit for researching rare diseases. See related story in this week’s ePT.