GSK’s R&D Review: Successes & Lessons Learned
Feb08

GSK’s R&D Review: Successes & Lessons Learned

Three years after reorganizing its discovery research activities into small, multi-disciplinary units, GlaxoSmithKline is providing a first peek at how its new approach to R&D is faring. A healthy chunk of its year-end earnings presentation yesterday was devoted to discussing the productivity of its research engine, and what can be expected out of its labs in the next three years. As we described, the goal of its 2008 revamp was to create a biotech-like, entrepreneurial feel within the walls of a big pharma firm: After being one of the first drug companies to create research hubs, or what it calls “centers of excellence in drug discovery,” GSK last year created “discovery performance units” (DPUs) within each hub. Each of the 38 DPUs operating now has a multidisciplinary team of up to 60 scientists focusing on a therapeutic area, a disease pathway, or some aspect of basic biology. GSK also formed a “discovery investment board” that makes funding decisions for the research projects in each DPU. The idea is to bring diverse perspectives on the merits of each project: In addition to [GSK R&D head] Slaoui, the board includes a biotech company CEO, a senior public health official, and GSK’s heads of drug discovery, late-stage development, and business development. DPUs are intended to operate like a biotech company housed in a big pharma firm. Much as a biotech gets funded by venture capitalists, a DPU receives an initial bolus of money and then extra cash when certain project goals are met. Each DPU had an initial review after a year of operation and will undergo another review this month, the 18-month check point. The board meets a last time at the three-year mark. GSK says there are clear signs that the DPU approach is working. Although the company is spending less on R&D and has raised the bar for moving a drug candidate into late-stage development, it has increased the number of molecules in its late-stage pipeline, Patrick Vallance, GSK's president of R&D told the Haystack. Under the new R&D regime, 22 molecules have moved into late-stage development, and Vallance wants to see 30 molecules pushed forward in the next three years. And in what Vallance believes is a sign that scientists are becoming more ambitious and attempting to do genuinely novel early research, roughly 17 publications in came out of GSK’s labs last year. Prior to the DPU approach, basically no papers were being submitted to prestigious journals, he says. The board, which had its final review in November, decided to shut down three DPUs, and create four new DPUs. Funding for six existing DPUs was upped by more...

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Merck Adds to Industry-wide R&D Cuts
Jul08

Merck Adds to Industry-wide R&D Cuts

Merck is finally revealing details of the deep cuts it planned to make in its organization following its acquisition of Schering-Plough. We thought this would be a good time to remind readers of the extensive R&D cuts the pharmaceutical industry has made in the last two years. One has to wonder what will be left to trim during the next round of cost-savings efforts. For a more complete chart that shows how this process started back in 2008, see here. 2009: January: Pfizer buys Wyeth, plans to eliminate 15% of the combined workforce of about 128,000. March: Merck acquires Schering-Plough, plans to cut 15% of combined workforce of 106,000. April: Sanofi-Aventis overhauls its pipeline. Research on 14 drug and vaccine candidates, including seven in Phase II or III trials, is discontinued. September: Lilly reorganizes into five units—oncology, diabetes, established markets, emerging markets, and animal health—and plans to eliminate 5,500 jobs, or nearly 14% of employees, by the end of 2011. November: Pfizer plans to shutter six of its 20 research sites to reduce overall lab space by 35%. Research will end in South Brunswick, N.J.; Chazy and Rouses Point, N.Y.; Sanford, N.C.; and Gosport and Slough, England. Roughly 1,300 researchers work at the locations earmarked for closure. 2010 January: GSK proposes ending R&D at several sites, including Tonbridge, England; Verona, Italy; Zagreb, Croatia; and Poznań, Poland. Preclinical development ends in Mississauga, Ontario, and neurosciences drug activity closes in Harlow, England. February: AstraZeneca plans to cut 8,000 jobs on top of the 15,000 positions targeted for elimination between 2007 and 2009. The company drops 20 compounds from development and ends discovery research in 10 diseases and most vaccines. It will close sites in Leicestershire and Cambridge, England, and Lund, Sweden, and end discovery research in Wilmington, Del. May: Takeda plans to cut 1,600 jobs from its North American operations, including 20% of staff at its Lake Forest, Ill., R&D center. July: GSK sells its Verona, Italy, site to Aptuit, transferring 500 staff—almost all graduate-level scientists—to the contract research organization. July: Merck says it will cut exit operations at eight R&D sites and eight manufacturing sites as part of its previously announced plans to shed 15% of its combined workforce following the acquisition of Schering-Plough. R&D facilities to be phased out over the next two years are: Montreal, Canada; Boxmeer (Nobilon facility only), Oss, and Schaijk, Netherlands; Odense, Denmark; Waltrop, Germany; Newhouse, Scotland; and Cambridge (Kendall Square), Massachusetts, U.S. Manufacturing facilities affected include sites in Comazzo, Italy; Cacem, Portugal; Azcapotzalco, Mexico; Coyoacan, Mexico, and Santo Amaro, Brazil. The Mirador, Argentina, and Miami Lakes, Florida, facilities will be sold. Chemical manufacturing will...

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