GSK to cut jobs as r&d focus shifts
UK drugmaker GlaxoSmithKline is to cease research into drugs to treat depression and pain as part of a restructure aimed at improving productivity and delivering greater returns.
UK drugmaker GlaxoSmithKline is to cease research into drugs to treat depression and pain as part of a restructure aimed at improving productivity and delivering greater returns.
The company said it would focus its r&d on neurodegenerative and inflammatory diseases such as Alzheimer's, Multiple Sclerosis and Parkinson's.
The changes at GSK will lead to thousands of job cuts worldwide, while delivering additional annual pre-tax savings of £500m by 2012. The firm's current cost-cutting programme is expected to give £1.7bn of savings by 2011.
Chief executive Andrew Witty said approximately 70% of the extra savings would be "directed to the bottom line to enhance profitability".
Other pharmaceutical giants such as Pfizer and AstraZeneca have already announced similar cost-cutting measures and job losses.
Witty said GSK would make r&d investment in areas which give the best return and has created a new division to specialise in the development and commercialisation of medicines for rare diseases, such as Duchenne Muscular Distrophy, Hunter syndrome and Fabry and Gaucher disease through initial collaborations with two specialist companies, Dutch biotech Prosensa and JCR Pharmaceuticals of Japan, agreed in 2009.
Marc Dunoyer, GSK's president of Asia Pacific and chairman of Japan, will lead this new operation, working with Patrick Vallance, GSK's senior vice president of Drug Discovery. The new division aims to strengthen existing partnerships and establish further in-licensing opportunities.
"The risks associated with product development in these diseases are generally lower as in most cases the target is known; the patient population is identified and clinical trials involve relatively small numbers of patients," said Witty.
Turnover in 2009 increased by 16% to £28.4bn, although growth was 3% on constant currencies, while pre-tax profit rose from £6.7bn to £7.9bn. The performance was helped by £883m of sales of GSK's swine flu vaccine, which Witty expects to continue in 2010. Growth of 20% in emerging markets, which now represent 10% of group turnover, also contributed to the sales increase.
Good pharmaceutical performers included Seretide/Advair, which saw 21% growth to £276m in emerging markets, and the Relenza vaccine product, which had sales of £720m, compared with £57m in 2008, and a strong retail performance in Japan.
"Our strategy is delivering and I believe that GSK is now moving to a position where we can deliver our goal of long-term sustainable performance," said Witty.