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GSK Rearranges, Once More

There have been a lot of announcements in the biopharma field this week, and I’m just now getting around to GlaxoSmithKline’s from a couple of days ago. The company announced that they’re dropping 30 R&D programs and refocusing the ones that are left. Cancer and immunology are now back in favor, and rare disease programs seem to be mostly getting cut. The great majority of the budget, though, will be spend on respiratory conditions and on HIV/infectious diseases, which have been traditional strengths of the company.

There are two ways to think about this. On the absolute scale, these moves all can be defended, one way or another. It is interesting to see GSK abandon the rare disease business model, which many other companies have been rushing into over the last few years. Many have noted that this includes getting rid of a high-profile stem cell therapy where the company was a pioneer – that’s a topic all by itself, and worth coming back to.

But on the relative scale, relative to what the company has been doing in the past, it’s a mess. GSK got rid of a lot of their oncology a few years ago, and now they want back in? It’s hard not to think of some of this as flailing around, and you can bet that some of the company’s former employees see it that way. On the glass-half-full side, you might think of some of the reversals as rectifying decisions that haven’t worked out, and in that case, what alternative is there?

Outside of the particular details of this re-org, though, it’s worth thinking about what it says about the organization of big pharma R&D in general. Go back over the last twenty years in the business and trade press, and you can find all sorts of stuff about GSK’s research layout. As with so many other companies, whatever the latest iteration might be, it’s what everyone has been looking for. Now, at last, everyone’s positioned to be lean, effective, courageous, and productive – right? But you can’t get these qualities by asking for them, or by proclaiming them. They’re rare, and they’re hard.

If there were some notably more effective way to run a big drug company’s R&D, you’d think that someone might have hit on it by now, and that others might well have noticed and decided to emulate it. Instead, we have what we have in the industry: every few years, another rearrangement and rethink, because there is apparently no magic scientific delivery system. Centralize, decentralize, control the units or let them fly, splice and merge and then rend asunder. After a while it looks like Coleridge’s “ceaseless turmoil seething”, only this one leaves in its wake not huge fragments bounding around, but rather posters, desk ornaments, slogans, business-magazine headlines, and binders from training courses.

62 comments on “GSK Rearranges, Once More”

  1. DrugDiscoveryMaven says:

    As the old adage says: “Change is the only constant”. In such a fast-paced environment as that which prevails at GSK, change is all but inevitable and it is something that is not just accepted but rather is actually generally welcomed by employees. Sir Andrew Witty totally altered the ethics ethos at GSK and now Emma Walmsley has come in to sharpen the focus so that GSK can play to its strengths. It is worth noting that there are no plans to reduce R&D headcount but instead to redeploy resources to prioritized areas. Most fair-minded observers would agree that this is a perfectly reasonable approach. Doubtless, we will see the usual puerile and peevish comments from a few disgruntled former employees who left the company years ago but who never miss the chance to get a dig in. When compared to the current situation at some of other Big Pharmas, GSK appears to be a beacon of stability that witnessed a seamless transition of power to a new and extremely capable and dynamic CEO. Sir Andrew left a great legacy that Emma is now building on.

    1. Derek Lowe says:

      Glad to see that you’re still with us, after all these years.

      1. johnnyboy says:

        Apparently PR is the one thing that remains a constant at GSK.

      2. johnnyboy says:

        Apparently PR is the one thing that remains constant at GSK.

    2. b says:

      So we get to see that Agilist was employed by the company, not just Sir Andrew. Entertaining.

    3. Anon says:

      @Agilent – Quit your sickening brown-nosing, and get your head out of the sand. Nobody is fooled.

      Walmsley is actively *undoing* everything Witty has done because neither of them have a clue. It’s like watching Trump trying to erase all traces of Obama from history.

    4. anon the II says:

      Look out Kellyanne! I smell competition from the Maven.

    5. Passerby says:

      DrugDiscoveryMaven:

      As the old adage says: “Mindless Disruption is the only constant”. In such a dysfunctional environment as that which prevails at GSK, mindless disruption is all but inevitable and it is something that is not accepted but rather is actually hated by employees. Sir Andrew Witty totally altered the ethics ethos at GSK and now Emma Walmsley has come in to annihilate whatever focus was left so that GSK can scatter its remaining strength to the winds. It is worth noting that there are yuge plans to reduce R&D headcount and to squander resources by prioritizing unproductive middle management shenanigans. Most fair-minded observers would agree that this is a perfectly moronic approach. Doubtless, we will see the usual unsurprising and perfectly reasonable comments from a few valuable former employees who left the company years ago and who even given the chance would not want to be part of the organization again. When compared to the current situation at some of other Big Pharmas, GSK appears to be a turbulent storm of instability that witnessed a destructive transition of power to the same old and less than useless CEO. Sir Andrew left a smoldering pile of rubble that Emma is now making bounce.

      There, fixed that for you.

      1. drsnowboard says:

        Chapeau!

    6. Kirekegaard says:

      do you like sit watching these sites? Is that your real job, your real existence? Because you really aren’t doing GSK GSK GSK! any favours whatsoever. Most of these folk have like, degrees and stuff, you know?

      1. Some idiot says:

        Yeah well, I used to be irritated by his/her comments, but then i realised after a while that it is just their job, and so they probably don’t necessarily mean it, but get their pay to put this mash on blog sites. I would guess that they have been monitoring the usual sites for posts ever since the rearrangement/call it what you will was announced. But would be amusing if they thought that their comments actually made a (positive) difference! They certainly don’t in this forum…

        🙂

        1. M says:

          Does this show up on other sites too? I’m honestly curious.

          It’s so distinctive–the one clearly anomalous post with the drunk the corporate cool aid attitude, the obligatory use of the full “Sir Andrew Witty” title and the zero follow up posts. It’s so counterproductive for this audience–so obvious and out of touch with any actual researcher concerns it signals that the people managing this public campaign either don’t know or don’t care about science.

          I used to assume it was just a private PR thing attached to Witty and that this explained the tone deafness. At this point though I’m wondering if it’s performance art–like some anonymous poster keeping it going as a parody or something.

    7. tangent says:

      Or translated to Maori to Kazakh to Yiddish to Welsh to Afrikaans to English:

      As the old saying goes, “The only constant is change.” APS, like the fast pace, but all these changes are inevitable and acceptable, but there is something that not only farmers at the end. Sir Andrew Culture and Ethics of the GSC Very clever Sharpen focus now Emma Valmsley, you can get into operation and GSC. This reduces the number of research and development staff, but instead of the main directions for redistribution of resources it has been noted that there are no plans. It is the most urgent, most agree that is an honest. In fact, we are the last to see more children and workers left the company a little cranky, but it does not exclude the possibility of exclusion. Learning new CEO is very strong and has the ability to demonstrate an example of stability in the organization of Big Pharma and ICT in comparison with the current situation, and when the dynamic. Sir Andrew Emma Great Legacy.

      (I’m stunned the first sentence did so well!)

  2. Anon says:

    Let’s face it, management haven’t got a clue how to fix the industry’s business model, so flailing around back and forth is all they can think of. Buy, divest, up, down, in, out, shake it all about. And what? No real change, and the same old diminishing returns.

    And management get paid to do this???

    1. clothing optional says:

      As Warren Buffet once said, “you only find out who is swimming naked when the tide goes out.” It’s been clear for some time now that many GSK senior R&D management and supporting sycophants have been skinny-dipping on the job. Unfortunately, there’s usually a 5-10 year lag time after the tide changes to know if changes to R&D structure and investment have paid off. This aggravates accountability, especially when senior R&D management in Pharma tend to be adept at reaching for the bath towels just as the tide goes out. However, Vallance must be an exhibitionist at heart – he’s way overdue exiting center stage and frankly it is embarrassing. Perhaps he’s had difficulty landing his next performance. Baldoni is even worse on the eyes – anyone who keeps claiming things like we can use “AI” to “cut down R&D development time to a single year, from more than 10 in some cases” (June 25, 2017 WSJ), must be smoking some serious CB1 action while bathing. Perhaps all his hard work reorganizing the deck chairs of PTS over the years (instead of focusing on a tangible pipeline) addled his brain. Could he please just dress, retire, and enjoy his stable of sports cars? Contrary to comments that the new GSK CEO ascended the throne because of gender representation, she’s actually exceptionally talented at applying bath towels when the tide goes out and therefore eminently qualified for Sir Witty’s old position. Time will tell if the new regime at GSK can get focused, get lucky, or both.

  3. johnnyboy says:

    Agilist is quick on the draw this morning.

  4. exGlaxoid says:

    Change for the better was welcomed by employees. Change due to management not knowing anything about drug discovery was not welcome.

    As both an ex-employee, and still a shareholder, how can you explain the share price, which was as high as $72 back in 1996, now at $41 a share after 20 years? How can you explain the almost $10 billion in penalties, fees, and charges for misconduct since the GSK merger, other than by the series of CEO’s total lack of ethics? If the company had stayed Glaxo-Wellcome, they could have hardly found a way to lose value as well as GSK has. The head count of the company has been shrinking for 10+ years, so just because the plan is not to reduce headcount today means nothing. How do you explain selling off consumer products one day and then buying more a few years later? Exiting oncology right before it hits a huge growth spurt. Face it, GSKs management has failed for the last decade, almost no really new drugs have come out since 2006.

    And the cuts made before include cutting people with 3 drugs to market, national awards for their work in medicinal chemistry, and a few who went elsewhere and got drugs to market within 10 years. So clearly the cuts were not well thoughtout.

    1. clothing optional says:

      “The head count of the company has been shrinking for 10+ years, so just because the plan is not to reduce headcount today means nothing. ”

      Correct. Predictably, Dame Emma et al brought in another batch of consultants (guessing McKinsey, who else?!) to advise GSK leadership what to do about their lackluster R&D. The fix went something like this: “What have you been doing? Your R&D pipeline is poorly focused, a mess. There are way too many projects that cannot be cost-effectively developed. Your research staff is over extended in supporting the current portfolio and therefore it is ineffectual. You must aggressively trim the number of R&D projects, refocus the portfolio with greater clarity towards marketable endpoints, while retaining and redeploying your current R&D staff to deliver a focused pipeline. … And by the way, please put on some clothing!”

      Why is it that Pharma always pays good money to bring in a team of consultants to state the obvious? Corollary, why does the C-suite get paid so much? In a year or two, odds are the same consultants will return to advise culling staff, instead of projects – I sincerely hope not.

  5. Barry says:

    Increased focus on cancer while cutting work on rare diseases buries the assumption that we know how many diseases “cancer” is. We do not. In the nightmare scenario, it turns out to be a large number of rare diseases, few of which are common enough to repay the R&D. But sometimes, an effort focused on a rare disease (e.g. CML) will later be found to have broader indications (so Gleevec became simultaneously an “orphan drug” and a “blockbuster”!)

    1. Chrispy says:

      The success of Keyruda would suggest that there may be approaches that attack multiple types of cancer.

      Come to think of it, this is true of chemotherapy, too.

      1. Barry says:

        Vogelstein’s “Hallmarks of Cancer” points to about six characteristics full blown cancers will share. For some (e.g. independence from external growth factors) there are lots of possible mutations that will throw that switch. For others (e.g. escape from external death signals) it seems that the CTLA4 and PD1 channels are common to many cancers. And the strongest signal in all of cancer genomics suggests that–at least for colorectal cancers–they all have p53 defects in common.

  6. Horlicks says:

    After 10 years of GSK R&D innovation there’s little to show for it, much like trying to boil water by churning. In truth, GSK has been following the herd all along, just not very efficiently or effectively. It seems very late in the game to move back to oncology, but maybe they can poach their way back into the herd.

    @DDMaven/Agilist/…, everyone who reads ITP recognizes that your spinjitzu is of the highest quality. You should really consider starting a satirical Pharma blog – sincerely. Were you also trained in the Classics, like the new GSK CEO?

  7. Calvin says:

    Since I work at GSK, I’ll bite.

    The changes have, internally, been broadly welcomed. There was a lot of guff in the pipeline, that while very cool scientifically (if not now maybe some time in the past) were never going to make a product. And certainly nothing that would make money.

    But in reality the changes are not as sweeping as the headlines might suggest (which is maybe why a nervous workforce has been pretty positive about it). The DPU model stays, but in reality it is no longer the mini-biotech within pharma model and is more based around a couple of projects (i.e. just like everybody else); it’s been like that for a while now. The DPUs sit within therapeutic areas. It’s all about the 4+1 therapeutic areas which had come back into style a while back and is now the de facto model. Just like everybody else. So projects are being pruned but on the ground (in discovery at least) it’s not a massive change.

    As for oncology, while I admit is was weird to sell the commercial portfolio, that was a just the way it worked. A necessary evil to do the vaccine and consumer deal. But actual discovery work never stopped after the Novartis transaction, which his why there are a bunch of compounds in P1/2; so we’re not back into oncology from a discovery perspective as we never really left. Some people left (often the best people who can go elsewhere) that probably should have been held on to. GSK wouldn’t be the first company to balls that up. Will GSK actually end up launching oncology drugs commercially or will they just partner? We shall see. And it seems to me that leadership was not committing either way. Given the speed-dating nature of all the combo work that might be the wise option. After all, who’d want to be AZ and want too lead in oncology only to find that you had to dole our 8B to Merck to cover your failure.

    There is the usual chat around going faster (especially in development) etc and making better decisions and new “magical” portfolio management, but overall it seems like a positive change that internally people were asking for.

    The big thing is that the headcount-not-reducing-thing appears to be real. People are just being redeployed. Sure some people will take there opportunity to leave, but there are no “official” headcount reductions. That has been repeated internally and externally by 3 extremely senior executives, including our new leader. Never say never, but the loss of face/credibility that would be required to then turn round and fire a bunch of people would be substantial. So this is a restructure not involving mass redundancies (in R&D). That’s not happened for a while.

    So overall, pretty reasonable. Not as dramatic as it might appear from the outside. Emma is an “interesting” person, but it could have been much worse. She’s definitely edging away from Witty’s volume sales approach and we’ll be back to the good old blockbuster model with a focus on US sales. I think that will please investors although we all know the risks there.

    I’ve worked in biotech, pharma and academia, and GSK is pretty decent in comparison to many other companies. So a general thumbs up so far. I’ll get back to gulping down that Kool-Aid

    1. Emjeff says:

      Quite an endorsement – “could have been much worse.” I’ll risk being called a misogynist and state that Dr. Emma was hired primarily because she is a woman.

      The real mystery is this, and I’d love DrugDevelopmentMaven/Agilist to comment: Why in the world does Patrick Vallance still have a job? His tenure has been marked by nothing but declining productivity and lay-offs. Don’t credit him with the oncology successes – that baseline was built before he came. What a disaster he is.

      1. Calvin says:

        Well I’m a pragmatist. We could have been AZ….

        PV. On that the general consensus is “tick tock”

        1. Some idiot says:

          😉

          Thanks for an honest inside view (especially your longer post). I am always particularly interested to hear what the people actually doing the work think. Thanks, and good luck with it! I have been using your asthma drugs for decades now, and am very thankful for it. One of the reasons I got into Pharma myself, to try and make a difference for others. Keep up the good work!!!

          🙂

        2. azer says:

          Amusingly, at AZ we console ourselves with the fact that at least we’re not GSK.

          1. Calvin says:

            Touché

          2. Kierkegaard says:

            And that lack of self -knowledge runs very deep, clearly

  8. skeptic says:

    It’s astonishing that the people in management get paid so much to preside over such destructive nonsense.

    It’s even more amazing than the fact that someone is willing to be as shameless a shill as Maven for a (presumably) much smaller paycheck.

    1. Dr. Manhattan says:

      @Sceptic “It’s astonishing that the people in management get paid so much to preside over such destructive nonsense.”

      What is even more astonishing is that at 2 companies I was at, the CEOs were dismissed before their agreed contract times were up. One received $193 million in severance, the other $62 million.

  9. skeptic says:

    “If there were some notably more effective way to run a big drug company’s R&D, you’d think that someone might have hit on it by now, and that others might well have noticed and decided to emulate it.”

    Given the timelines in drug development, it would take at least 15 years of using a consistent strategy in order to tell if that strategy was working better than others. This is obvious, yet no one has the patience or fortitude to try it.

    Thus the constant churn of reorganizations and platitudes.

    1. I think an additional issue is one of changing environments. It can take twenty years to develop a drug to market, but the environmental conditions (eg, changing administrations, attitudes toward healthcare, increasing biomedical knowledge, technology, etc.) turn over at a much faster pace. If there isn’t stability in the environment it becomes even more challenging, and maybe impossible, to measure the efficacy of a given business model and organizational structure.

      1. skeptic says:

        Good point, but do you think that the business and regulatory environments, or even the state of knowledge (in most areas, wouldn’t apply to, say, genomics/genome engineering) change at anything like the rate of pharma reorganizations?

  10. skeptic says:

    Note to DDMaven, and his employer: I don’t know if Calvin’s comment is real or not, but it makes GSK look (relatively) good.

    Yours makes GSK look absolutely bad.

    1. Calvin says:

      Thanks Skeptic. I’m real and my comments are real/honest. I think what I’m saying would not surprise or offend anybody at GSK. Others, especially those whose projects are being chopped, might have a different view which is reasonable. Nothing that I’ve said was not said by GSK at Results (the investor call where all the juicy stuff happens). I think Agilist (or whoever) is painting a slightly more euphoric view (Agilist is probably NOT GSK PR by the way) and while not wrong, is just a bit too happy clappy. That said, Witty was very very popular internally………

      Man, that Kool Aid is strong!

      1. Some idiot says:

        Hmmm… Interesting… I would be curious to know why you think that Agilist is not GSK PR… I would be even more interested to hear your thoughts as to who he/she would be, because I am damned if I can think of another reason for him/her to post these comments (unless, as another poster mentioned, he/her was planning a career as a satirist…!).

        🙂

        1. Calvin says:

          Simple. I asked. The PR group have never heard of this blog. It’s simply not on their radar. I know a few of them and so I asked the question. The language is not consistent with the type of language they tend to use. It’s not being done centrally as part of some strategy so my guess if that it somebody in R&D, not PR. Or more likely it’s a spoof. Somebody having fun.

  11. Peter Kenny says:

    You have to expect some shuffling of deckchairs when a new CEO arrives on the bridge. The rare disease field is particularly challenging for long term planners because you need to predict what insurance companies will be prepared to cover in 20+ years time. I have heard running a Pharma company likened to steering an oil tanker.

    1. skeptic says:

      “I have heard running a Pharma company likened to steering an oil tanker.”
      It certainly is a hard job to do well. But I can’t help but note that oil tanker captains don’t try to steer like they’re on a jet ski.

  12. iNOS says:

    I left GSK a few years ago and would tend to agree with Calvin. Witty was definitely well regarded but I do not think the same could be said of the guys running R&D. How the president of R&D survives is a mystery to most people. There were also a lot of empty suits in middle management during my time and most of them are still there so it seems like the “de-layering” process has some way to go.

  13. Kierkegaard says:

    I am long time ex-GSK but can confirm Calvin is real and has access to the kool-aid ad libitum. He seems to manage to just sip it though….

  14. dearieme says:

    I wonder what “totally altered the ethics ethos” means? Like who? Jesus? Napoleon? Attila the Hun?

  15. Old says:

    I’m just happy to see a GSK post and no mention of Sirtris, may be a first!

    1. Some idiot says:

      Ooops… just happened… 😉

  16. cancer_man says:

    SRT2104 lives!

  17. D says:

    Its impossible to see the competitive landscape with major companies switching their whole portfolio every 1-2 years. Who is doing stuff right, who is doing stuff wrong? No way to tell. Companies are so self-focused ( as, in all likelihood, their managers personalities ), that they are basically flying blind. Its like if every team in the MLB switched to playing NFL every 2 years and then back No one really cares or should care who wins or why they won anymore.

  18. Bruce W Grant says:

    A chemist who quotes Coleridge has my unbounded admiration.
    (It is said that, upon tasting ice cream for the first time, he remarked, “If only this were a sin, the pleasure would be perfect.”)

  19. MTK says:

    I’ve always assumed that Agilist/Maven is a schtick which some fail to get.

  20. MedicineWoman says:

    “If there were some notably more effective way to run a big drug company’s R&D, you’d think that someone might have hit on it by now”

    The irony is that GSK has hit on it, more or less. After 2+ decades of mergers, reorganizations, CEDDs, DPUs, blah blah blah… what is left? Anti-infectives and respiratory. The two therapeutic areas considered valuable enough to be essentially ring-fenced from the rest of the deck-chair rearrangements. Apparently the model for success is to hire smart people, resource them well, keep them (mostly) protected from the vicissitudes of management, and let them do what they best.

    1. Diver Dude says:

      A-freakin’-men. As an ex-GWer, I can say that this was the message we gave the suits in ’98. 20 years on, the message may be getting through.

  21. Me says:

    Infectious disease protected from the vicissitudes of management? I worked in the most successful antibacterial group in GSK. It was axed in 2008 after Moncefs famous commitment to infectious disease. The unit that was kept had never delivered a drug. We were axed within days of the launch of altabax, which we discovered.

    1. Medicine Woman says:

      Sorry to be so single-minded. I was thinking mostly about antivirals when I said anti-infectives. I am sure the antiviral groups felt pelted by management as well, but they were kept mostly outside of the various structural arrangements for many years.

      I think that what happened to the antibiotic group in 2008 is a great example of my point. Whenever a high producing group of scientists was “rearranged” for the sake of organizational efficiency, productivity dropped off a cliff. Has anything much come out of GSK in the way of antibacterials since altabax? Feel free to click this link for a cynical chuckle. https://www.gsk.com/en-gb/research/what-we-are-working-on/antibiotics-research/

      1. cynical1 says:

        Umm, yeah the guy drawing the structure in the antibiotic video for GSK from your link is actually drawing an HIV integrase inhibitor. Face palm.

        1. MedicineWoman says:

          FWIW the link went directly to a “dead” page on the GSK website when I posted it. Glad to know that they fixed it and still provided material for at least an eye roll.

          While at GSK I did some work with the antibacterial group and found them to be quite a hard working, smart, strategic group overall. I hope they are getting a decent shake in the new rearrangement of the deck chairs. The rejuvenated link suggests that someone in the company has done some reading about antibiotic resistance. Hopefully that person has passed on the key messages to EW.

  22. sgcox says:

    Looks like GSK is shutting down Neuro research centre in Shanghai and transfer few projects back to West.
    What goes around, comes around..

    1. Old says:

      This site has been incredibly unproductive since it was established and tarnished by scandal-it’s about time. The closing of the Verona neuroscience site years ago and shifting resources to China purely based on politics and not science was a bad move as was getting out this therapeutic area now that there is a resurgence happening in the field.

  23. Andy II says:

    Wonder if McKinsey and Co or BCG like firms are working with GSK top management and define the path to the glory as they have been doing for many pharma companies…

  24. Old says:

    Based on the safety profile for inotersen not a bad move given where Alnylam is thus not as big a deal as the press makes it out to be. Maybe there is some rationality creeping into R&D(?) Good luck Ionis.

    https://endpts.com/gsk-abandons-ionis-fda-ready-inotersen-as-new-ceo-sweeps-out-rare-disease-efforts/

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