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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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June 24, 2009

GSK's Getting Better. Just Ask the CEO.

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Posted by Derek

There are some interesting statements from GlaxoSmithKline CEO Andrew Witty here at Reuters. He admits that morale was completely in the scupper around the place a few months ago, which certainly seems to be true, but says that they're turning things around. To that point, remember all that stuff a few years ago about how GSK's research structure exemplified pretty much everything that a drug company needed to have? Well. . .

"We've really thrown into reverse much of the trend of research organisation that had developed over the last 15 years," Witty said.

Over that time, the drugs industry was a big commercial success but it took a "wrong turn" by deciding that drug discovery was an industrial process based on large-scale application of technologies like genomics, proteomics and combinatorial chemistry.

"These were all supposed to transform productivity yet none of them did. It turns out, in my view, that research is much more of an art than a science," Witty said.

Several thoughts come to mind. First off, I take the point about art versus science, but it's hard to do art on an industrial scale. That, to my mind, has been one of the major problems in all of drug R&D. He's right that the industry keeps seizing on things that promise to take some of the craziness out of the process - but it's not like the temptation isn't still around. We just haven't seen the latest brainwave yet.

But still, over time, some of the random element has decreased. We actually do understand a lot of things better than we used to. We know to look for hERG, to pick one example, and there are others. But these things don't (yet) add to enough of a transformation. Adding more and more knowledge to the pile has to help - I'm certainly not enough of a nihilist to deny that - but it's fair to say that it hasn't helped as quickly and as thoroughly as we might have hoped.

You can find opinions all up and down that spectrum: at one end are the nihilists themselves, who hold that the problems we're trying to solve are (at present) too hard, and what's more, they're likely to remain too hard for the foreseeable future, so you'd better get lucky - and design your research structure to improve your chances of doing that. Moving up from there, you have a lot of people in the middle who see incremental progress, but (with Goethe) worry that "Where there is much light, there is much darkness". Every new advance untangles a few things, but also ends up illustrating how much more we need to know. Opinions in this crowd vary, from pessimists who come close to the first nihilist group, all the way up to optimists who hold out hope that things will start making more sense soon. And past them, you come to the super-optimists, the Kurzweilians who are waiting for the Singularity.

But finally, reading the Witty article, I can't help but imagine an interview in around 2020, with whoever's in charge then talking about how they had to get rid of all that musty old research structure that the previous management team had put in. . .

Comments (19) + TrackBacks (0) | Category: Business and Markets | Drug Industry History


1. Alig on June 24, 2009 8:55 AM writes...

I love the part where he shows that the pipeline is larger than it has ever been, so his conclusion is that research is broken and he must fire 50% of R&D. And then use the money saved on internal staff to make great acquisitions like elesclomol and Sirtris.

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2. petros on June 24, 2009 9:33 AM writes...

I wonder whether the R&D staff at his CEDDs would concur?

Harlow now uses 1 floor of 1 building while Stevenage is also less well staffed than hitherto

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3. processchemist on June 24, 2009 9:49 AM writes...

Are we sure that GSk pipeline is larger than ever?

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4. David P on June 24, 2009 10:02 AM writes...

All these fads like combi-chem promise much but can't deliver what people expect. They end up in the tool box of things we can use to approach a problem and then it comes down to us making the best use of them.

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5. Hap on June 24, 2009 10:28 AM writes...

Has anyone in drug development made the "do more with less" model of research work well? The enlarged pipeline seems inconsistent with the decreased research staff otherwise, unless they are buying others' research products (and of course make them work better than previous developments).

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6. Cellbio on June 24, 2009 12:26 PM writes...

Hap- I have seen the "do more with less" work for personal gain only. More projects move through more portals, serving bonuses and promotions, with less known about the true merits of a molecule.

I have used the art analogy before to try to fight against the numbers game as a strategic component of R&D. The story goes like this- A group of MBAs study a period of time in which Christies auctions off masterpieces for exorbanant sums, and decides that their insight and skill can drive efficiencies as never seen before. They reason through the numbers, finding that of all painting sales, 1/x are "blockbuster" sales. Those that come to auction are a fraction, 1/y, of those that passed a prior hurdle, like artisitic acclaim. These represent a fraction, 1/z of the output of a given artistic community. Then the dazzling math, success is only 1/xyz. So then the clear plan that follows is to have these bright minds organize artist to produce XxYxZ paintings each time period in order to assure a blockbuster sale at auction.

Sound silly? Of course it is, and argument by analogy is weak, but I found this a good tool to get non-scientists to challenge assumptions about success being born out large numbers coming in the front of the funnel.

Oh and, no matter how many chimps sit in front of typewritters (computers now huh), the product is never going to be a Shakespeare play, or if not never, at least not in time to be reported with 2nd quarter earnings.

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7. partial agonist on June 24, 2009 12:31 PM writes...

The "bigger is always better" idea seems to be an utter failure. I am getting more respect for those rare companies that stay relatively small and somewhat efficient relative to their mammoth competitors. Lilly is an example. Though they have done some acquiring, it has usually been through a relatively "small and target-focused" approach instead of the "dog swallows the cat who swallows the fish who swallows thwe worm" model of slash and burn acquisition.

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8. emjeff on June 24, 2009 2:28 PM writes...

Reporting from inside the belly of the GSK beast, I can say that Witty is correct; morale was pretty bad, but it has turned the corner. The discovery staff was slashed, but it was to focus effort on more select targets, rather than "catch-as-catch-can". People I've talked to in the discovery area like the arrangement so far.

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9. Alig on June 24, 2009 3:43 PM writes...

I don't know who emjeff has been talking to, but the people I know there seem to think most of the DPU Heads are either slave-drivers from the Biotech world or idiots from academia who wouldn't know a drug if it slapped them accross the face. The only increase in morale is the relief that they still have a job. At least Moncef's wife and mistress are both still employed in R&D. Morale would have been really bad if one of them had to be let go.

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10. Cellbio on June 24, 2009 6:03 PM writes...


Did the biotech slave-drivers originate as academic idiots immune from drug slaps? I think I know one of them.

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11. MoD on June 24, 2009 7:36 PM writes...

Also inside the "belly of the GSK beast", I agree with mjeff. The moral is getting better, at least from my medicinal chemist's perspective. As for the DPU heads - yes some of the words written here are correct, especially about knowing what a drug is. However, their position can be viewed as a gateway to development, clinical trial strategy and future research directions - not necessarily target selection. That is being left to the medicinal chemists and biologists.

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12. anonymous on June 24, 2009 8:26 PM writes...

"....but it's not like the temptation isn't still around. We just haven't seen the latest brainwave yet."

Oh, but we have. "Outsourcing" to "offshore" sites is the latest brainchild of management.

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13. Brian on June 25, 2009 4:32 AM writes...

"research is much more of an art than a science," Witty said.
I suggest means:
...follow trails using insight based on compiled knowledge and induction more than combinatorial computation and mechanistic deduction
...seems to me Witty is doing his job as CEO. He communicates strategy well and to all audiences. He smooth, his interviews ooze business focus and he is always on message. The R&D message seems to be we'll do it with people and more those who are personally invested in what they are doing and we are going to communicate out results rather than disappoint you with possibilities.
The market has downgraded the sector but is watching closely, doesn't dislike what he's saying but looking for evidence this works for GSK. So far so good, the plan is coming into focus.

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14. anon on June 25, 2009 7:43 AM writes...

Another slice of that Witty interview that Derek didn't highlight was somewhat less flattering:

“Many of the people we had in the discovery organisation left in the period of change, either through their own volition or because they were not up to operating in the kind of way I have described," Witty said.

What goes on in this man's mind? I challenge Witty to identify these people, a vanishingly small number compared to the wholesale slaughter wrought on GSK's discovery organization through layoffs. I doubt there were many people who left voluntarily or "were not up to operating" in a certain way. Most scientists I know are willing to go with the management flow, adapt, keep their noses to the grindstone, and thus stay employed.

Revisionist history, anyone?

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15. Anon on June 25, 2009 8:58 AM writes...

GSK is doomed.

The scientists who have accumulated the vast experience of the art of how to discovery and develop drugs have all left. The current management who have come from academia or failed biotech think they know but they don't have a clue. In 3-5 years when the Board and shareholders realize that the DPU model has failed and there is no viable pipeline, GSK will be forced to merge or be taken over.

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16. Pfizerite on June 25, 2009 8:24 PM writes...

If there is no viable pipeline why woulf Pfizer take them over? On the other hand with no viable pipeline it would be time to take someone else over ...

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17. Teuta9 on June 26, 2009 2:54 PM writes...

Moncef Slaoiu let the cat out of the bag when he said the future was actually about "doing less with less".
De-risking is the order of the day: traditional drug research is complex, costly, unpredictable and so "bad" economics. The new mantra is:

* do less, by diversifying into other areas (Consumer health, generics etc)
* what you have to do inside, do cheap (off-shore)
* for the rest, leave the risk to others then buy it in later (and safer).

Welcome to Pharma2.0

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18. Hap on June 29, 2009 11:41 AM writes...

Number 3 only works when you have the whip hand - when you are either the major source of funding for biotechs or when you have significantly more leverage in selling drugs than other companies (they can't sell their drugs easily on their own). If big companies have few products, then their leverage in negotiation with smaller companies who have potential drugs is likely to be lower - without that leverage, smaller companies will have the ability to demand compensation for the risk they've taken, so at least some of the cost advantage of farming out the risks of drug development goes away. Also, the point in drug development where big companies have leverage - clinical trials - is also the spot where most of the costs are amassed, so I don't know if that model saves enough money to cover the costs of other people's drug development and still make more money than currently.

How do you expect to make lots of money if you aren't taking any risks? Unless you have a monopoly (or friends in government), there isn't much of a way to make lots of profit without taking risks. You can derisk your business if you are willing to deprofit it as well, but I don't think shareholders will like how that turns out.

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19. bigpaycheck on June 29, 2009 7:56 PM writes...

Dude, Big Pharma snubbed you after you left Schering, let it go, so what.

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