Cuts focus on GSK research
DRUGS giant GlaxoSmithKline plans to narrow its research and could sell its rare diseases business as it steps up an efficiency drive under new chief executive, Emma Walmsley.
The company will cut more than 30 pre-clinical and clinical programmes that are “unlikely to generate sufficient returns” and allocate 80 per cent of its research and development spending to respiratory and HIV/infectious diseases, along with two potential therapy areas of oncology and immuno-inflammation.
It is ending collaboration with Johnson & Johnson over rheumatoid arthritis drug sirukumab and will phase out support for diabetes treatment Tanzeum. A review of its rare diseases unit has been undertaken and “options are being considered for future ownership of these assets”.
Walmsley, pictured, who took over as chief executive in April from Sir Andrew Witty, confirmed her support for Glaxo’s threebusiness structure of pharmaceuticals, vaccines and consumer healthcare.
The priority is to improve in pharcameuticals and to strengthen its pipeline of medicines as she admitted Glaxo had been “too broadly spread”. She also earmarked the US as a key market.
The company is targeting an extra £1billion of annual cost savings by 2020 to fund product launches and research and development investment. This will be achieved through shaking up its supply chain and manufacturing network as well as selling off more than 130 non-core brands with annual sales of £500million.
Last week Walmsley said Glaxo would sell its Horlicks business in the UK and abandon a planned £350million investment in a biopharmaceutical facility in Cumbria. About 320 jobs will go over the next four years with the closure of a manufacturing plant in Slough and outsourcing of some manufacturing at a site in Worthing, West Sussex.
Walmsley’s priorities were unveiled alongside secondquarter results showing sales up 12 per cent to £7.3billion after a boost from a weaker pound. Revenue was up 3 per cent at constant exchange rates. Its pretax loss was cut from £318milllion for the same period last year to £178million.
Walmsley said: “Our priority for the second half of the year is to maintain this momentum and prepare for the successful execution of several important nearterm launches in respiratory, vaccines and HIV.” Shares fell 40½p to 1545½p.