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GSK, Lilly shake up research organizations

Both drug firms are shedding clinical-stage compounds amid an R&D overhaul

by Lisa M. Jarvis
July 27, 2017 | A version of this story appeared in Volume 95, Issue 31

Credit: GSK
A photo of GSK CEO Emma Walmsley.
Credit: GSK

Two big drug companies, both struggling with R&D productivity, are making major changes to their research organizations. GlaxoSmithKline and Eli Lilly & Co. revealed the shake-ups when announcing their second-quarter earnings.

Credit: Lilly
A photo of Lilly CEO Dave Ricks
Credit: Lilly

GlaxoSmithKline unveiled the more dramatic cuts, with CEO Emma Walmsley vowing to trim 30 preclinical- and clinical-stage molecules from the firm’s new drug pipeline. In addition, GSK is weighing the sale of its rare-disease assets.

Already, 13 clinical programs have been marked for divestment, and other molecules are under review. The overhaul is expected to save the company $1.3 billion by 2020.

It is the first big move for Walmsley, who took the reins at GSK in April. In a July 26 presentation to investors, she pointed out that the company’s research organization has been spread too thin.

Between 2006 and 2015, GSK launched 25 new drugs, putting it near the top of the pack, but the average peak sales estimates of those new products are among the worst in the industry.

“We have not consistently translated the output into commercial success,” Walmsley said. She noted that compared to its peers, GSK had focused on a broader range of projects, spent less on each drug candidate, and seen its molecules linger in the clinic for longer than the industry average. Taken together, those weaknesses point to “the need for a significant overhaul and reevaluation of how we develop our clinical assets,” she added.

Going forward, the lion’s share of GSK’s research dollars will be spent on two therapeutic areas—respiratory disease and HIV and infectious disease—and two aspirational areas, oncology and immuno-inflammation.

Although GSK is trimming a substantial number of compounds and switching up how research funds will be allocated, a spokesperson says the size of the firm’s research staff should not change significantly.

Meanwhile, Lilly’s CEO, David Ricks, who took the helm in January, is revamping his firm’s oncology portfolio. The goal is to focus on a few key areas, including next-generation immunotherapies and combination therapies that address tumor resistance. Lilly will look to license out or partner 10 cancer treatments in Phase I and Phase II studies.

Lilly will also more actively look outside its labs for promising oncology treatments. “Moving forward, you will see us being more aggressive on the business development front, especially regarding early-phase and preclinical assets,” Sue Mahony, president of Lilly Oncology, told investors.

The oncology overhaul comes as Ricks tries to refresh what many in the industry view as a lackluster research organization. For years, Lilly has struggled with disappointments to its late-stage drug pipeline.

Just last week, the company said it will be at least 18 months before it can again file for U.S. Food & Drug Administration approval for baricitinib, a JAK inhibitor for rheumatoid arthritis. In April, the agency surprised Lilly and Incyte, its development partner, by rejecting their new drug application for the pill.



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