Glaxo R&D chief Slaoui outlines his formula for success

Big Pharma's been debating for years over how to whip its massive and often woefully unproductive R&D bureaucracies into some kind of fighting shape similar to the lean, mean fighting machines they see in biotech. For GlaxoSmithKline ($GSK), the answer lay in carving up its investigators into 38 teams--or drug performance units, DPUs, in the parlance of its U.K. masters--originally set up in 2008. Each qualified for a three-year runway. And, like their counterparts in biotech, the time has come to see if they can earn a three-year extension.

But that wasn't the only change. In an extensive interview with the Wall Street Journal, R&D chief Moncef Slaoui explained his strategy in some detail. In addition to broadening responsibility for effective drug development to a large slate of team leaders, Glaxo also shifted its R&D budget by dropping some diseases as well as rebalancing the budget to move dollars out of discovery and into development. More of the discovery work, and the risk that goes with it, was left with its 50 partners.

"In pharmaceutical R&D...the budget decreased from about £3.2 billion to £2.8 billion," says Slaoui. "The fraction we dedicated to discovery went from about 60% in 2006 to about 38%. The fraction dedicated to development went from 40% to now 62%, which is really our intent."

GSK also wants to focus on increasing its ROI rather than simply allotting dollars to R&D based on a percentage of sales.

"I think it was a big mistake for the industry to define the R&D budget as a percentage of sales," he adds. "Sales are the outcome of R&D that was conducted 10 years ago. Today's sales are absolutely not a predictor of how many good projects will be prosecuted."

Slaoui's philosophy: "The four key principles that underpin everything we have done in R&D for the past 5 years are: focus on the best science, re-personalize R&D, externalize R&D and focus on return on investment."

Now those DPUs have hit the stage where they will have to defend their work and see if they can justify another three years of funding.  

- here's the article from the WSJ

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