Fueled by windfall profits from swine flu vaccine sales, GlaxoSmithKline reported a big spike in revenue for the fourth quarter. But the extra money hasn't stopped the pharma giant from sharpening its budget-cutting axe once again. Glaxo executives this morning outlined an additional 500 million pounds ($791.6 million) of budget cuts as it scales back on R&D.
Specifically, Glaxo says it will stop R&D efforts in certain neurological areas, with work grinding to a halt in depression and pain, according to Bloomberg. The company will focus on Alzheimer's, Parkinson's and multiple sclerosis and create an R&D unit that will concentrate on new therapies for rare diseases. Glaxo makes it quite clear that this new unit would be an active collaborator.
"We are allocating capital to areas where we can get the best return on investment," the company says in the statement. CEO Andrew Witty told reporters that the budget cuts included a further reduction in the company's workforce that would amount to the "hundreds rather than thousands" in the U.K.
"In addition to our existing discovery effort, alternative opportunities need to be explored to make treatments available for rare diseases," says Marc Dunoyer, GSK's president of Asia Pacific and chairman of Japan, who will head the new rare diseases unit. "This complementary approach will combine our existing global expertise with specialist partners. Over time, this new unit has the potential to deliver multiple therapies responding to high medical needs of underserved populations of patients."
- check out the story from Bloomberg
- here's the press release on the new unit