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GSK Continues R&D Cuts

GlaxoSmithKline is continuing its R&D-site-cutting ways, according to this article in Le Monde. Their site in Les Ulis, outside Paris, is now said to be closing, as the company’s research consolidates to two locations: Stevenage in the UK, and the US site in Upper Providence, outside Philadelphia. This is all part of the company’s “recentrage stratégique” (strategic refocusing), which, unlike some things, still doesn’t sound any more enjoyable in French than it does in English. The company is going to spend a few months looking for a buyer, and if no one steps up, close the site completely. French labor laws, I’m sure, will make that a protracted process, but the end result does not appear to be in any doubt.

29 comments on “GSK Continues R&D Cuts”

  1. rb says:

    Agilist, ou etes vous?

  2. tally ho says:

    la gestion GSK – Je pète dans votre direction générale.

    https://www.youtube.com/watch?v=FWBUl7oT9sA

  3. Synergized says:

    While this is indeed bad news for those concerned, it is hardly surprising. Sir Andrew has been quite open about his desire to consolidate efforts in the two R&D powerhouses at Stevenage & Philly. Some decidedly good news from GSK today on the IL-5 inhibitor mepolizumab (http://www.fiercebiotech.com/story/glaxosmithklines-asthma-injection-heads-eu-approval/2015-09-24?utm_medium=nl&utm_source=internal). More proof that the current strategy is paying off handsomely.

  4. DrSnowboard says:

    This is a real shame. I worked with Les Ulis a while ago now and they had all the characteristics of a biotech site – good science, commitment and drive with minimal bureaucracy. Seems like GSK can only claim 1 of those these days.

  5. DrSnowboard says:

    Hello synergised- agilist…. You do know that Stevenage is a powerhouse gutted of any real drug discoverers? There are probably more active scientists in Biocatalyst these days but ‘Sir Andrew’ must love that as they actually pay rent, which pays for the mothballed wings of the once hopeful Stevenage

  6. Shillsville Arizona says:

    @Synergized (or should I say Shillergized) – if your comments are more subtle one day you may just sneak them past this readership.
    @Dr Snowboard – mothballed wings at Stevenage? Would be nice – for many scientists, they’re packed in so there’s not enough room to swing a cat-alyst these days.

  7. Phil says:

    How does an a treatment finally nearing approval after 11 years in the clinic say anything about GSK’s current strategy?

    https://clinicaltrials.gov/ct2/results?term=mepolizumab&pg=1

  8. DrSnowboard says:

    Well, Ok, I may be behind the times. A while ago a startup was being offered space in the biology wing, ground floor which was mothballed. It would be interesting to know how many wet chemists, medicinal chemists are still extant on the other side of the courtyard. The culls have been deep and numerous – I have many ex-colleagues who are now teachers or getting on fine in CRO’s

  9. Emjeff says:

    Synergied- you do realize that this can not go on forever. Cutting sites and pocketing the savings to distribute a ridiculously high dividend to shareholders can only go so far. At some point, you’re going to need an actual revenue stream. And,then you’ll realize that Witty sold your revenue stream ( and the people who generate it) to Novartis and Parexel. Don’t worry though, I am certain Novartis or Pfizer will be hiring boot-lickers…

  10. KerryF says:

    Too bad about Les Ulis – those were the folks who came up with the drug that became Cialis. Then GSK decided it wasn’t worth anything and it went to ICOS, then Lilly.

  11. Johnny-John says:

    “Seed corn!? Ha! Real men don’t need no stinkin’ seed corn….. “

  12. Anon says:

    @Synergized / Agilist – just so that you understand (in case you really are ignorant, rather than just licking boots, pretending all is dandy when you already know GSK is fubar)…

    GSK is NOT cutting costs because of some amazing “growth strategy”, otherwise GSK would invest *more* into R&D if the returns were any good. No, GSK is cutting R&D only because it has to, in order to keep R&D spending in line with shrinking sales. And the reason sales are shrinking is that R&D has not been able to deliver new products, for two reasons: First, R&D productivity at GSK has been terrible; and secondly, because R&D keeps getting slashed, creating a vicious death cycle.

    Basically, GSK is screwed. So now you know – or can stop pretending that you don’t! 🙂

  13. Hap says:

    It’ll work this time. Really.

    I guess the problem is how to fix R+D, because cutting it can’t go on forever (or rather, it’s a strategy that only pays off now, maybe). If it is not efficient enough, whose job is it to figure out how to make it work better? I would have imagined that at least part of that responsibility lies in management (because figuring out how to apportion people and resources to tasks likely to generate money would be their job). In most cases, they seem to have shirked this job. So why are they still there?

  14. Kelvin says:

    @Hap

    FYI, I have been preparing and will soon publish a huge report on this issue (diminishing R&D productivity), including a critical strategic review of alternative approaches to fix it. Bottom line is the only way to fix this will be to completely re-invent our fundamental approach to drug discovery, starting from a blank sheet of paper. But management will never attempt to do this while they are up to their neck managing basic operations…

    So ultimately, I think it will be up to academia or perhaps even a small biotech to fix the underlying problem. Hopefully Pharma will still be around to exploit it by then.

  15. Lyle Langley says:

    Well, unfortunately, these cuts probably don’t come as a surprise. Are they downsizing for future growth, or more probable, getting ready for the Pfizer take over, which has been rumored since AZ rebuffed Pfizer’s attempts to keep that cash overseas.

  16. Anon says:

    @ Lyle: Probably they are downsizing to *avoid* a takeover, since that’s exactly how Pfizer would make money …

  17. Lyle Langley says:

    There is still plenty of synergies for Pfizer to take advantage of to make money with a company that large.

  18. Vino Veritas says:

    Striking irony, on the day GSK announce the closure of Les Ulis, the research group that did this…..

    http://www.nature.com/nature/journal/v468/n7327/abs/nature09589.html

    James Bradner (milking BET for all its worth) gets the top gig at NIBR.

    You couldn’t make it up. Nice work folks!

  19. petros says:

    And mepolizumab was in phase II (for SB) in what? 1995?

  20. ex-glax says:

    @DrSnowboard – Still a few good ones left across the courtyard, but diminishing numbers 🙁

    @Synergized – The above is no thanks to you or those clueless wonders whose asses you so enjoy kissing. The sooner they are gone and you with them the better for science.

  21. Anon says:

    @Vino Veritas: well said, although a group at Mitsubishi Pharma also deserve much of the credit now being shamelessly stolen by Bradner.

  22. David says:

    Well, maybe they just need to multiply prices by 50 to pay for R&D! Seriously, Shkreli is just the (il)logical end of this same strategy.

  23. Anon says:

    All is not lost, remember that GSK will unveil on R&D Day in November their robust pipeline of 40 compounds in Phase 2-3 development.

  24. Jose says:

    “robust pipeline of 40 compounds in Phase 2-3 development.”

    Has any pharma company anywhere ever had that?

  25. Emjeff says:

    Jose- good point, and of course you know the answer is no. Any investor worth his/her salt knows you have to discount 90% of them, particularly those in the pre-clinical or Phase 1 stage. That leaves 4.

  26. Anon says:

    @Jose / Emjeff:

    You are assuming that quality is constant, and that output will be proportional to input.

    That is rarely true, as quantity usually comes at the price of quality. In general, even if a pharma company manages to get more compounds in its pipeline, it still ends up getting the same number out – roughly 1 or 2 NMEs per year.

    So all this means is that GSK will spend a load more to pay for a lot more failures.

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