10. GlaxoSmithKline

GSK's R&D is predominately focused on vaccines and respiratory, and its oncology pipeline is now mainly phase 1 since much of its late-stage and marketed cancer assets were given to Novartis a few years back.

R&D budget: £3.62 billion ($4.49 billion)
Change from 2015: Up 1.7%
Total 2016 revenue: £27.88 billion ($34.6 billion)
R&D budget as percentage of revenue: 12.9%

GlaxoSmithKline has one of the lowest R&D budgets in terms of percentage of revenue among its peers; although its research budget was slightly up on 2015, this is still markedly down from the around £4 billion it was spending in 2012-13.

Some investors want to see change at GSK: Its financials were for many years pretty dull (it has picked up in recent times, however), and its R&D not as exciting as that of some of its Big Pharma rivals; this may have prompted the company to bid farewell to long-serving CEO Sir Andrew Witty this year.

But his replacement, insider Emma Walmsley, has raised more questions over whether she can enact change (insider CEOs tend not to be that radical), and whether Walmsley, who will be paid less than Sir Andrew, has the experience in R&D required to run the company, given that her tenure before taking the chief reins was in the consumer biz.

What will Walmsley inherit? Its R&D is predominately focused on vaccines and respiratory, and with much of its late-stage and marketed cancer assets given to Novartis a few years back, its oncology pipeline is now mainly phase 1.

RELATED: Pharma mold-breaker Witty turns over the reins after 9 years at the GSK helm

One of its more advanced cancer candidates, the phase 2 NY-ESO-1, is partnered with Adaptimmune and works as a T-cell therapy that targets the NY-ESO peptide which is present across multiple cancer types. In the U.S., the pair are conducting several phase 1/2 studies for the med in patients with synovial sarcoma, multiple myeloma, melanoma, NSCLC and ovarian cancer.

The company is also seeking deeper inroads into rare diseases, with a number of assets in late-stage development, and last year it scored a major regulatory win when Europe approved its “bubble boy syndrome” gene therapy Strimvelis.

The drug is an ex vivo gene therapy for severe combined immunodeficiency due to adenosine deaminase deficiency (ADA-SCID), a condition that only affects around a dozen patients in Europe, and 350 patients worldwide.

The drug came as a result of partnership between GSK and Italy’s San Raffaele Telethon Institute for Gene Therapy and the Milanese biotech MolMed, which is based at the Institute. A deal between the groups was struck back in 2010. It has not yet sought FDA approval however.

But there have been some issues here: At the beginning of this year, Carlo Russo joined a growing list of ex-GSK staffers moving into biotech after working on and helping launch Strimvelis, as he went over to Milan, Italy-based Genenta Science, a biotech focused on hematopoietic stem cell gene therapy in cancer, as its new CMO.

Russo, who was head of R&D rare disease unit, joined other GSK/Strimvelis vets, namely Andrea Spezzi and Nicolas Koebel, who left the company seeking a biotech role.

They in fact both now work at Fierce 15 winner Orchard Therapeutics, Spezzi as CMO and Koebel as SVP of business operations, and are working on a rival drug to Strimvelis using a lentivirus approach that they believe will be better, safer and easier to use for patients.

GSK did make some relatively big external bets last year, notably its $715 million joint venture with Alphabet's Verily to create a new R&D company focused on bioelectronics, as well as a £175 million ($230 million) pay-out to gain global, exclusive rights to a phase 1 monoclonal antibody to treat severe asthma from Janssen.

The company is also in a development race to develop a more “natural” way to boost red blood cells in anemia after starting pivotal late-stage trials of its daprodustat candidate last year.

Daprodustat is a hypoxia-inducible factor prolyl hydroxylase inhibitor (HIF-PHI), an emerging class of drugs that are being pitched as a more convenient oral alternative to injectable erythropoiesis-stimulating agents like Amgen’s Epogen and Aranesp and Johnson & Johnson’s Procrit.

GSK is however playing catch-up in the development of the class with FibroGen—whose roxadustat started phase 3 testing since 2014 and has been licensed to Astellas and AstraZeneca—as well as Akebia Pharma/Mitsubishi Tanabe which has vadadustat in late-stage testing a little bit behind roxadustat.

But if GSK can serve up the goods, its drug could tap into a market estimated by Datamonitor to be worth around $5 billion a year.

RELATED: GSK chases FibroGen's lead as anemia drug daprodustat starts phase 3

Sir Andrew, however, did say in his final results meeting in February: “The next 24 months will be significant for GSK’s pipeline and it marks the start of another intense period of R&D activity for the company, as we expect important data read-outs on around 20-30 assets in HIV, respiratory, immuno-inflammation, oncology and vaccines.”

But analysts at Leerink said ahead of its Q1 2017 results that its potentially “impactful pipeline” assets “still lack visibility.”

The firm said: “GSK's early stage pipeline portfolio harbors some intriguing programs, but most of these assets are a few years away from real value realization. The company has a broad immuno-oncology, epigenetics, and cell therapy portfolio, mostly in phase1/2 studies.

“In HIV, the full potential of the cabotegravir long-acting treatment regimens and the new agents acquired from Bristol-Myers Squibb (e.g., attachment inhibitors and maturation inhibitors) remain to be seen. The Immunology portfolios with multiple ‘first-in-class’ agents and the daprodustat for treatment of anemia of chronic kidney disease could also be high impact assets, but all have expected filing dates in 2019 and beyond.”

At least there's also good news for the Walmsley-led GSK. A (temporary) relief came when the FDA sent a CRL to Mylan in late March, turning away a generic to GSK's respiratory revenue driver Advair. If no copycat is seen in 2017, GSK expects core earnings to expand by between 5% and 7% at constant exchange rates.

>> Check out GSK’s pipeline.

10. GlaxoSmithKline