GSK will cut 3 R&D units, add 4 as DPU review triggers shakeup

Following a three-year review of its new approach to R&D, GlaxoSmithKline ($GSK) today revealed that it has decided to ax three of its 38 tightly-focused research units and add four more in a shakeup. The final tally, which doesn't specify exactly who wins or loses, also included plans to beef up the budgets for 6 of their Discovery Performance Units while slicing funding on 5 others. And CEO Andrew Witty (photo) pronounced himself quite satisfied with the DPUs' overall performance, with the new annual numbers reflecting a boost in productivity as GSK moves ahead with plans to file for approvals on four new drugs and vaccines--including an MEK inhibitor for melanoma, trametinib, which scored paydirt data in Phase III, according to today's release.

Alone among the Big Pharma companies, GlaxoSmithKline has been tracking the rate of return on the money it spends on its late-stage pipeline work. In 2010, the return rate was 11%. Last year, that figure swelled to 12% as Witty vows to make it to the 14% mark. GSK says it will keep its R&D budget, a bellwether in the industry, flat at 3.7 billion euros.

In one of the most closely watched R&D restructurings in the industry, GSK launched its DPU approach to drug development back in 2008, promising to cut groups that underperform and back those making headway after winning three-year budgets for their work. The idea, advanced by Witty and R&D chief Moncef Slaoui, was that scientists would stay more closely focused if they knew their teams' funding relied on tangible progress--a daily reality for most biotech companies.

"These units comprise 5-70 scientists, with each group focusing on one particular disease or pathway," noted Witty in GSK's annual report. "Over the last three years, I have visited many of the DPUs and am very pleased with the energy, approach and productivity we are seeing from our scientists in these units." There's no word of any layoffs or departures in R&D today. GSK has made it clear that even if some teams didn't make the cut, it would transfer employees to other DPUs.

Now that the three-year review is over, GSK says the next three years will see 30 programs move into late-stage development.

Those DPUs are now wrapping six late-stage programs, Witty says. The four slated to be filed for approval this year include Relovair, its COPD treatment partnered with Theravance ($THRX), Promacta for hepatitis C and the MEK inhibitor for melanoma. The melanoma drug is GSK'212, or trametinib, which went into Phase III about a year ago.

- here's the release from GSK (.pdf)