Thursday, July 27, 2017

Profits before cures

GlaxoSmithKline plans to cut nearly one in seven of the pharma group’s clinical drug development programmes as part of a shakeup of the business and offload 130 non-core brands, possibly selling off the unit that works on treatments for rare diseases.  GSK is following in the footsteps of its smaller British rival AstraZeneca, which has divested a large number of non-core drug projects recently. 

CEO Emma Walmsley said the company would focus more on backing the “real winners” – medicines that generate substantial returns.  She wants £1bn of annual cost savings by 2020, which will be used to fund the development and launch of new products and offset the impact of pressure on drug pricing. Research would focus on just four areas – respiratory, HIV and infectious diseases, cancer and immuno-inflammation conditions such as arthritis – and they would get 80% of the research spending. The company extended a commitment to pay its current 80 pence per share annual dividend through 2018.

Some 33 programmes were to be cancelled, sold or partnered. They included 13 in clinical development, including treatments for hepatitis C, psoriasis, cancer and rheumatoid arthritis, and about 20 in preclinical development. It also plans to stop selling the diabetes drug Tanzeum and end a collaboration with Johnson & Johnson over experimental rheumatoid arthritis drug sirukumab.

Walmsley previously worked for L'Oreal.

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