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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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In the Pipeline

« $720 Million Worth of Sirtuin Research | Main | A Salute »

April 25, 2008

Why Buy, Anyway?

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Posted by Derek

I don’t want to say that this is a trend, but I notice that GSK is saying that they’re going to leave Sirtris more or less alone as well (as Takeda has said they’ll do with Millennium). The researchers in both shops should feel good about that, and not only because they’ll be keeping their jobs. They’re getting a vote of confidence in the most meaningful way that a large company can give that to its employees: by paying you money and not messing with you.

Of course, these deals have two sides to them. I don’t know what it’s like in Takeda back in Japan – my contacts inside the Japanese pharmaceutical industry aren’t extensive. But I think that some of the people at GSK (where I do know a lot of people) are wondering just what motivated their company to spend $720 million on Sirtris rather than on them.

It’s a fair question, even though I don’t have a problem myself with the Sirtris deal (as I said yesterday). But the sirtuins themselves are targets that anyone can work on, and you’d assume that a big outfit like GlaxoSmithKline could, if they wanted to, make a big push into the area and find some interesting things. So why didn’t they? The most obvious reason would be Sirtris had already done a good deal of that work, and it was more economical for GSK to buy it than to redo it. Another possibility is that the chemical space for drug-like hits in that area may not be very spacious, and that Sirtris may have already carved out a good piece of that real estate.

There’s also a bit of Glaxo history to deal with. The company had already, about fifteen years ago, decided to make a great big push into a promising new research area: nuclear receptors. They set up a whole research institute and did a huge amount of good science trying to figure out how these things worked, what they were good for, and how to get drugs that affected them. I got interested in the field in the late 1990s, and it became clear to me very quickly that Glaxo’s effort was the most serious of the bunch (and that included some really substantial research going on at Merck, Lilly and some other outfits). The company had teams of people who seemed to do nothing else than study the structures of these things, generate reams of X-ray data, synthesize huge lists of ligand molecules of every kind you could want, and so on. Just run "Glaxo nuclear receptor" through PubMed to see what I mean.

And what did it get them? From what I can see, not much. Avandia (rosiglitazone) is a nuclear receptor ligand (for PPAR-gamma), but its activity had already been discovered, and it was in clinical trials without a known mechanism. Figuring out how it worked was one of the Glaxo team’s early triumphs. But Avandia has turned out to be famously troublesome, and no others have come to market, despite multiple tries in the clinic. The huge amount of time and money the company spent generated a lot of interesting science, but appears (at least to me) to have brought in not one dime of revenue. (No doubt someone from GSK will correct me if I’m wrong).

So you can see how the company might be wary of starting a big internal effort to explore a massive, complex, and risky new field of biology. Politically and psychologically, it’s probably easier for them to structure this in terms of an acquisition.

Comments (15) + TrackBacks (0) | Category: Aging and Lifespan | Business and Markets | Diabetes and Obesity | Drug Industry History


1. burt on April 25, 2008 8:41 AM writes...

I think this was money well spent. This is way more interesting than that weird Synta cmpd. they spent 1 Billion on.

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2. Merkwurdigliebe on April 25, 2008 11:33 AM writes...

I don't have much to say about this post except that rosiglitazone (and piaglitazone, and one other "glitazone") isn't very soluble and therefore a pain to work with when I was radio-labeling it.

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3. Petros on April 25, 2008 1:38 PM writes...


From recent talks with GSK people from Harlow and Stevenage sites I doubt they are over entranced with this. Ther'e been a lot of head trimming, and shipping jobs to Singapore/China, so this deal will hardly "encourager les autres". And the new R&D haed, a vaccine man, is not going done a bundle in the more traditional CEDDs.

BTW chatting to a US-based Brit at a meeting this week we were both saying how much we enjoy this Blog

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4. E G Cran on April 25, 2008 2:28 PM writes...

My guess is that all of GSK will migrate to China/India. Makes no sense to do Research in the US or Europe. This will do wonders for profits (which is what life is ALL about right?)

Do Asians read the 'Pipeline'? I guess only Derek knows for sure. He'll be the last American to shut off the lights when he leaves.

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5. Anon on April 25, 2008 3:08 PM writes...

Talking about moving jobs to Asia - has anyone analysed how much time the industry has before inflation in Asia makes it uneconomical to stay there?

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6. Malfitano on April 25, 2008 4:16 PM writes...

Just on the point made in your first paragraph, Derek, that GSK have said that they will leave Sirtris "more or less alone" and that Sirtris researchers should feel good about that. Forgive my cynicism, but, to give just one example, AstraZeneca said the same thing about Cambridge Antibody Technology. It took just a few months for that promise to be broken. Experience teaches that whatever big pharma might say about how they will treat their small acquisitions, they can't be trusted to keep their word.

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7. bootsy on April 25, 2008 7:17 PM writes...

Why buy? In addition to the reasons that Derek listed, there is also the advantage that such a deal eliminates the most significant competitor.

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8. Gaudisso on April 25, 2008 10:19 PM writes...

Although fascinating, nuclear receptor techology has thus far been a dead-end field which has yet to have yielded many compelling drug candidates. Witness interesting companies like Accelerated Pharmaceuticals which never got off the ground.

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9. milkshake on April 26, 2008 11:16 AM writes...

When Pharmacia took over Sugen, they left us alone but suddenly we had much more money for research (so we could buy decent NMR instruments with automation and prep HPLCs and could actually hire more chemists) and they would do HTS screening on their in-house collections for our targets - and it gave us three very good new medchem leads (before this we had only the oxindole series). This all took place before just before Pfizer bought Pharmacia; happiness can so fleeing

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10. milkshake on April 26, 2008 11:34 AM writes...

Nuclear receptors are a swampy targets from the medchem point of view: we have a methodology group here that does ligand -induced changes in deuterium exchange rate on the receptor, it is a quite elaborate MS-based protein research that can produce decent binding mode info on things that are hard to study by X-ray alone. From their presentations I gathered these receptors are tied to a frustrating variety of physiologic effects, relative proportion of which depends on how things bind to the receptors. It is not just question of whether the ligand is a partial agonist, inverse agonist, antagonist etc - in this case there are several distinct ways possible for the receptor changing its shape upon the ligand binding - and the hope would be to tie these change classes to the ligand effects in vivo. I am glad I am not making compounds for this project.

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11. anon on April 27, 2008 7:49 AM writes...

We are still waiting to hear how bad the cuts will be in metabolic disorders (former CVU group), and this deal with Sirtris is rumoured to have caused the number of people being cut in phila to increase. The number of chemists, biologists suddenly out of a job is rumoured to be quite substantial! Other theraputic areas within the company can only absorb 2-3 or so, if they happen to have the headcount. The company also makes everyone reinterview for their jobs when moving to a different theraputic area (or when determining who is going to be laid off), so it will be a tough competition between alot of very qualified people. Bleak times indeed...especially since I had been told that CVU was the place to be in the company a few years ago.

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12. The Pharmacoepidemiologist on April 27, 2008 9:21 AM writes...

Two observations:

1. GSK has a lousy track record on integrating acquisitions. If there's any value in SIRT (and I think there's a lot there), expect GSK to find a way to dissipate it. GSK has wasted a lot of money during the past decade, and this will likely be another example of its doing so. Really a shame, because SIRT had some really promising science and people. I doubt though that Westphal or Sullivan (I think that's his name) are particularly interested in sticking around in a Fortune 500 environment, and they represent a lot of the value of the purchased company.

2. The GSK metabolics group was located in North Carolina, so I'm surprised the Philly-based group is affected. However, the model for M&A in the pharmaceutical business has been the Amgen-Immunex hook-up, in which Amgen basically acknowledged that its own labs were incapable of producing new lead candidates and kept the Immunex labs in Seattle, while downsizing its own groups in Thousand Oaks. This sounds like it may be another GSK attempt to do the same. We'll see. At the end of the day, it's all about how many compounds get to market, not just how many NCEs one creates, something many medicinal chemists conveniently forget.

So, was this purchase good for GSK? I don't think we'll know for another 5-10 years.

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13. Too many comments on April 27, 2008 10:23 AM writes...

GSK does currently market a number of (1) anti-inflammatory glucocorticoids, (2) combination drugs which include rosiglitazone, and (3) a testosterone patch, all of which target nuclear receptors (NRs).

Granted, each of these drugs work through a "classical" NR target and were not the result of GSKs recent NR research. But this does show that nuclear receptors have been and continue to be an important class of drug targets.

The challenge of course is developing (1) selective receptor modulators with reduced side effects for the classical NR targets and (2) drugs that target some of the newly discovered "orphan" NRs. The large number of genes regulated by each of the nuclear receptors provides an enormous therapeutic potential and but also a substantial challenge to avoid unwanted side effects.

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14. Kevin K on April 28, 2008 7:31 AM writes...

To E G Cran,

I'm an asian, and yes, I do read the Pipeline, though I can't say the same for all the other asians.

From what I've seen, shifting their base to countries with cheap labour would only get products in quantity, not quality. I still think that the research should be done in countries that have proper space and lab equipment.

What Derek said makes sense though. Why bother spending so much effort on developing it when GSK can just buy it? The outcome of the purchase...lets just say that only time will tell if it was the right choice.

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15. emjeff on April 28, 2008 8:20 AM writes...

It would be nice if GSK left their new acquisition (Sirtris) alone. However, that would be like a scorpion not stinging you when you pick it up; it probably happens, but it's not natural. Nor is it natural to expect GSK, with its huge layers of middle management and its incompetent and bumbling R&D Chairman to leave this company alone.

Time will tell whether this acquisition was a good idea. I do know that what GSK needs to do now is to leave its own people alone. The lack of productivity of the CEDDS is not a result of a flaw in the CEDD concept (small, independent units with a biotech-like mindset); it's the fact that the CEDDS were never truly independent. Over each of was the central R&D Chair and his inept committee of syncphants and self-agrandizers who micro-manage every program and who are quick to crush any idea that is innovative or involves any kind of risk. Meanwhile, the R&D Chairman and his lickspittles,, (in between sleeping with his girlfriend and having screaming fights with former lovers in the hallway (our office is across from his, and several people have witnessed this)) are re-arranging the deck chairs on the S.S GSK and pushing all of the talent out the door. Moncef, please turn off the lights after everyone is gone...

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