Web Date: December 3, 2014
GSK Makes Deep Cuts To R&D In Research Triangle Park
GlaxoSmithKline is significantly shrinking activities in Research Triangle Park, N.C., as it shifts most of its R&D operations to sites in Philadelphia and Stevenage, England. The move is part of a global restructuring program—announced without detail in October—that is expected to produce $1.6 billion in savings over the next three years.
Currently, GSK’s RTP site employs about 4,500 people, 2,500 of whom work in R&D. Among the notable drugs to be developed at the site are Avodart, which treats enlarged prostates; Tykerb, a breast cancer drug; and AZT, the first HIV/AIDS treatment. In a letter notifying the North Carolina Department of Commerce of its plan, GSK said 900 positions will be eliminated at RTP in 2015.
In parallel with the downsizing, GSK and contract research organization Parexel have signed a letter of intent to establish a dedicated business unit within Parexel that will provide clinical development services to the drug company, according to GSK spokeswoman Melinda Stubbee. To be based primarily in RTP, the unit may take on some portion of the affected GSK researchers. Some of the remaining scientists will relocate to Philadelphia, Stubbee adds.
Employees at other GSK R&D sites are also bracing themselves for cuts. Staffers in Upper Merion, outside of Philadelphia, got details of the overhaul this morning through a video message from Patrick Vallance, the company’s president of pharmaceuticals R&D.
According to a source inside GSK who asked not to be named to protect his job, Vallance told employees, without providing details, that the company would exit some therapeutic areas. In its statement confirming the R&D cuts, GSK said only that it will “sharpen the focus in discovery and development and reduce funding in certain areas of the pipeline.”
Although GSK received five drug approvals in 2013—more than any other big pharma firm—sales have been modest. And they have not been enough to offset hits to the firm’s once-strong respiratory franchise. In particular, sales of Advair have eroded this year because of competition from branded drugs in the U.S. and generic competition in Europe.
GSK is the latest big pharma company to outsource more R&D functions. The practice took off in 2008 after Eli Lilly & Co. sold its Greenfield, Ind., R&D site to Covance in a deal that included a 10-year service agreement.
Earlier this week, Sanofi and the German contract research firm Evotec revealed plans for a five-year outsourcing partnership worth $310 million. The pact includes the sale of Sanofi’s R&D site in Toulouse, France, to Evotec.
The Toulouse site, which employs some 200 scientists who work on small-molecule drug discovery, houses Sanofi’s compound library. Sanofi’s 1 million compounds will be combined with Evotec’s more than 400,000 compounds into a library to be managed by Evotec. Sanofi will get “a contribution” of any products that are developed out of hits from the library, the partners say.
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