Righting the ship
Sir Andrew Witty
Since Andrew Witty beat Chris Viehbacher and at least one other candidate for the top job at GlaxoSmithKline ($GSK) in 2007, he has led several efforts to right a ship that had sailed in the wrong direction in a number of ways for years. He's sliced and diced the London-based drug company's R&D groups into smaller and more autonomous shops, piloting recent efforts in his industry to boost accountability among scientists and get better returns from R&D investments.
Witty, who took the helm at GSK in 2008 after leading its European pharma business, has had to navigate some industrywide squalls and bugs within his company's ranks. In the aftermath of the Avandia scandal, for instance, GSK has recently promoted ethical conduct among its sales reps through changes in how they are compensated. (We'll see how that works out.) Also, his aim to sharpen the company's R&D focus on truly novel medicines has gained lots of attention in the industry, with some detractors and boosters of the company's plan to split up its R&D efforts into nearly 40 separate groups with biotech-like agendas.
Like other drugmakers, GSK has been grappling with slow business growth in the U.S. and Europe, and it's not been immune to the ills of the patent cliff. Witty, like some of his counterparts, has sought expansion into fast-growing emerging markets in places such as Asia, but he's steered the company away from the megamergers that have largely defined Merck and Pfizer's strategies for weathering the storm. Yet the Asian pharmaceutical market, despite its rapid growth, doesn't match the size of the European and U.S. markets, which makes bringing new drugs to the U.S. and European markets critical to GSK's long-term growth. This year, Witty's company has more than a dozen late-stage programs yielding data, giving the industry an indication of whether GSK can replace sales of its big-time drugs that face generic competition such Advair with its next-generation products. For now, those products will have to come from the R&D groups at GSK and those of its partners such as Impax Laboratories ($IPXL) and Theravance ($THRX).
Yet this year got off to a rough start on the R&D front, with GSK and Theravance reporting in January that there were pneumonia-related deaths in patients taking their experimental COPD and asthma therapy Relovair, which GSK hopes will succeed Advair as a top respiratory product. If GSK suffers a string of setbacks in the clinic, Witty might not be able to avoid a big merger to bring in new products.