|GSK CEO Andrew Witty|
With sales of its flagship product Advair slipping as its new respiratory drugs fail to gain rapid traction, Big Pharma player GlaxoSmithKline ($GSK) is prepping some deep cuts in its U.S. operations, according to several reports over the holiday weekend.
As Bloomberg noted, Glaxo's North American chief, Deirdre Connelly, is expected to speak to staffers on Wednesday. Reuters has its own report, noting that hundreds of employees are expected to get the ax following GSK's earlier announcement that it plans to slice $1.6 billion out of its budget. And blogger Derek Lowe, who keeps a close ear to the ground on pipeline activities, says that the ax is most likely to fall hardest in Research Triangle Park in North Carolina rather than in the big complex of facilities that GSK operates in the Philadelphia area.
Noted Lowe: "I hear different reports on that, but I don't like the sound of any of them. I hate to start out the week on this note, but I know that the GSK folks have been expecting bad news for some time now. Let's get it over with, and see what happens then."
GlaxoSmithKline representatives issued a brief statement to FierceBiotech in response to our query. "GSK announced a new restructuring program to refocus our global pharmaceuticals business and deliver cost savings. The aim of this program is to improve performance by taking unnecessary complexity out of our operations and establish a smaller, more focused, organization, operating at lower costs, that supports our future portfolio. Each business unit is currently deciding how to respond to this challenge. When we do have proposals, we will first share those with our employees."
GlaxoSmithKline sent shock waves through the company's ranks on October 21 when it announced plans to shake up the company, slash costs and move R&D chief Moncef Slaoui over to focus full time on vaccines while tapping Patrick Vallance to head up R&D. GSK has had some successes on the research side of the business, scoring a slate of new drug approvals in 2013. But its big bets on MAGE A-3 and darapladib--both prominently cited by Slaoui as top prospects--flopped in the past year, leaving the pharma giant without the megablockbuster it needs to grow sales. Anoro and Breo have been introduced, but initial sales are below expectations.
The cutbacks come on top of a planned swap with Novartis ($NVS) in which GSK will hand over its oncology portfolio in exchange for vaccines. GSK has also been hinting about an IPO for its HIV franchise ViiV as investors grow increasingly restive about the company's deteriorating numbers on top of last year's bribery scandal in China.
- here's the Reuters story