When Did The Moral Decay Begin At GSK?…


Some commentators (and ex-Glaxo employees) on Corante speculate:

http://pipeline.corante.com/archives/2014/12/02/a_sad_look_back_to_2006_at_gsk.php

10. exGlaxoid on December 2, 2014 2:22 PM writes…

Just look at where the problems for GSK have come from. Former SKB manufacturing plants, Paxil and Avandia being promoted incorrectly, buying stupid things (most pushed by former SKB managers), and many other high level decisions, almost all of which were not from former GW people. The only mistake also pushed hard by the former GW people was going into China so hard and fast, both in sales and R & D (how many drugs have come from GSK China?)

Back in 2001 – 2006, we started hearing about how outsourcing some research would so great. We started looking at the growth and predicted that by 2015 there would be 10-20% of all pharma R & D done in China and India. I think it went much faster, and produced little so far, although I do expect that eventually China will start doing much of it, as they have enough resources to make it happen now. Many of the outsourced compounds, libraries, and much of the development work has been of poor quality, slower than before, and much of the work is questionable validity. Oh well.

But here in the US, we won’t have the money to buy the latest medicines from China, since no one will have a job any more, at least in many areas. But at least the former CEOs of the pharm and biotech industry will still have their yachts.

I just hope that the industry recovered at some point and can bring back some jobs once we realize the poor quality of what we get from outsourcing to the lowest bidder. Sorry to dwell on this, but my remaining friends still at GSK are now waiting in suspense, just in time for the holidays. What a great Christmas gift.

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11. anon on December 2, 2014 2:27 PM writes…

not only have sales and developments fallen short. GSK is now in seventh place trailing: JNJ, NVS, Roche, PFE, Sanofi and MRK

12. annon 2 on December 2, 2014 3:08 PM writes…

Many in GSK R&D at the time thought these comments were overblown, hyperbola, bravo, that could never come to pass. Drug discovery & development never has, and never will be analogous to electronic chips, packaging into computers or tablets or cell phones, high volume marketing with free will purchasing (eg not regulated or filtered by doctors or insurance or providers).

And then there were all the very costly missteps, some not directly from GSK, that already forced cuts to R&D: Avandia critic Steve Nissen, Sirtis, HGS, darapladib, China GSK, many reorganizations, invisible upper management, lack of accountability for the poor decisions (promotions instead)…..

It’s tragic that such good company(ies) could be so badly managed and so quickly decimated.


In the Pipeline

pipeline.corante.com/archives/2014/12/02/a_sad_look_back_to_2006_at_gsk.php

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December 2, 2014

A (Sad) Look Back to 2006 At GSK

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Posted by Derek

It’s generally painful to go back a few years and look at the large-scale pronouncements of a drug company’s upper management. Thanks to commenter Metamonad, we can, in light of tomorrow’s GlaxoSmithKline re-org, step back to 2006:

At the time of the £107bn merger of Glaxo Wellcome and SmithKline Beecham in 2000, the architect of the deal, Glaxo’s chief executive Sir Richard Sykes, spoke of creating the “Microsoft of the pharmaceuticals industry”. Now Mr Garnier, previously the head of SmithKline and the man who became the chief executive of the merged company, believes ramping up investment in the research and development of new drugs is crucial to making this vision come true.Mr Garnier said: “In terms of creating the Microsoft, this is a vision of the most R&D intensive company which I completely agree with. We have a chance to step away from the rest of our competition if we execute our plan well and we’re now in a position to do so.”

GSK is the second-largest drug company in the world, with a 7 per cent market share behind America’s Pfizer at 11 per cent. Last week Mr Garnier’s contract was extended by seven months to May 2008 so he could steer the group through a crucial year that will see the launch of several key medicines. They include Cervarix, a vaccine for cervical cancer, Tykerb, an oral treatment for breast cancer, and Eltrombopag, a blood clotting agent in the treatment of breast cancer.

These blockbuster drugs are set to bring in billions of dollars of extra revenue, enabling the company to pour large chunks into drug discovery from 2008, Mr Garnier said. This year the group is spending $4.4bn on developing new medicines, around 16 per cent of overall revenues, but the goal is to get that figure to the 20-25 per cent range over the next 10 years.

So how’d that work out? Tykerb has had a rough time of it in some clinical trials, and its revenues last year were about $340 million and falling. Ceravix brought in $270 million, down 37 per cent (although that drop was mostly due to trouble in the Japanese market). And eltrombopag, known as Promacta, was a brighter spot, with $307 million in revenues, up 46%. But you’ll note that all three of these put together did not bring in a billion dollars of revenue in 2013, which would surely not have made anyone happy if you’d told them that in 2006.

And the R&D spend last year was 15% of overall revenues – less than the starting point in the above article, and nowhere in sight of that 20 to 25%. And with the company set to cut even more tomorrow, I think we can rule that out for the near future, too.

Comments (15) + TrackBacks (0) | Category: Business and Markets

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