After reports surfaced in the Chinese press this week, GlaxoSmithKline has confirmed to FierceBiotech that it will be shutting down operations at its Shanghai R&D base as it looks west.
The U.K.-based drugmaker told FierceBiotech, “Following a portfolio review and prioritization, GSK has decided to close its Neuroscience R&D Centre in Shanghai and move key programs to its global R&D hub in Upper Providence in the U.S., where they will benefit from co-location with other pipeline R&D programs."
“The China R&D development organization will continue to be based in Shanghai and is set to expand over the next two years to accelerate the development of new medicines. We remain committed to China and will focus our R&D efforts in China on the needs of China, at both our Shanghai site and our Institute for Infectious Diseases and Public Health in Beijing.” It did not say how many staffers would be affected.
This comes less than a year after the company looked to strengthen its China R&D commitment. Li Min, GSK's global head of neurosciences and general manager of R&D China, said last year, as quoted by news site China Daily: “In the field of neurological diseases, we are very much committed to neurodegeneration and neuroexcitation. In medicine, you need to stay focused. You have to commit to one direction and make it happen.”
Two years ago, it launched the Neuro2020 project, encouraging partnerships with local universities, something Li said was “part of our five-year plan to establish both our research as well as connectivity to the rest of our ecosystem, especially in China.”
GSK has, of course, had a rather difficult past in the region. China is a major world economy with a growing middle class and the potential for big pharmaceutical sales and R&D, but tough policies led by a central and uncompromising government have made western biopharma expansion into China problematic.
Back in 2013, GSK became embroiled in a sex, lies and videotape-type scandal that saw allegations of bribery from certain sales teams in the region, with a deeper twist when a sex tape of former head of GSK China, Mark Reilly, in his Shanghai apartment with his girlfriend, was alleged to have been made, and then sent to CEO Andrew Witty. Witty has since been replaced by Emma Walmsley, who announced last month a major shake-up of the company’s R&D.
Walmsley said she was focusing GSK’s attention on two therapeutic areas in which it already has a sizable presence—respiratory and HIV/infectious diseases—and two in which it aspires to grow—oncology and immuno-inflammation. GSK will spend 80% of its R&D budget on top prospects in these areas. Neuroscience was not on her list of core areas to focus on.