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GSK's Commitment to R&D
  Nature Biotechnology 26, 840 (2008)
GSK slashes internal R&D
Nuala Moran
Job cuts at its Centres of Excellence for Drug Discovery (CEDD) in the US, UK and Italy, accompanied by an expansion of research in China, are raising questions about where GlaxoSmithKline (GSK) is going next in its bid to boost R&D productivity. Although it acknowledges 350 of 16,000 R&D jobs have been cut, the London-based company has recently announced it remains committed to the CEDD model and considers it to have been successful. GSK's head of drug discovery Patrick Vallance says: "In line with scientific developments, some realignment has taken place to focus our efforts where the science has created most opportunity and, as a result, reducing activity in other therapy areas." CEDDs are specialized units designed to be as nimble as biotechs but as well-resourced as pharma. Outgoing CEO J.P. Garnier said recently it's too soon to tell if CEDDs have borne fruit, given they have been in existence for seven years and the drug development cycle lasts for ten. But in July, GSK said it considered the model successful in terms of increasing productivity and strengthening the pipeline. Newly appointed CEO, Andrew Witty, is a supporter of the 'small-is-beautiful' model of biotechs. Inspired by a visit to GSK subsidiary Domantis, in Cambridge, UK, Witty has suggested that the optimum size for a CEDD may be as few as 35 staff. GSK has now formed even smaller units within CEDDs with a focus on accountability for single disease areas. "The small unit entrepreneurial culture we create will be supported by the depth and infrastructure of big pharma\the best of both worlds," Vallance adds. According to Martyn Postle, director of the consultancy Cambridge Biotech and Healthcare, the CEDD structure is becoming more and more flexible. As long as the CEDDs stick to their budgets and deliver on productivity targets they are given complete autonomy. "The heads of CEDDs can make them as integrated, or not, as they like; there will be people who are heads of CEDDs with very few internal resources." GSK will also seek to improve productivity by taking programs out of the CEDDs and entrusting them to spin-offs. The company has set up a new venture capital fund, though it has not said what the investment brief will be, nor how it will sit alongside GSK's long-running SR One fund. GSK is reported to have invited regulators and payers to critique drugs in development and to be prioritizing its pipeline accordingly. This move could be viewed as a nod to value-based pricing, a movement to fix reimbursement according to the benefits of a drug, which is gathering pace in Europe.
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