About this Author
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

« A Modest Literature Proposal | Main | BMS Freezes Salaries »

February 4, 2010


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Posted by Derek

I'll start a post here so those with details on today's GlaxoSmithKline news can leave comments. I assume we'll be hearing from the UK folks shortly, and the US more in the middle of the day. I also wonder if these announcements will be like the AstraZeneca one earlier - that is, cuts to be staged over a longer period. Those are a mixed bag. They keep people employed longer (and give them some hope that there may be a place to go by the time their position gets cut), but it also spreads Morale-B-Gone dust over a place for an extended time.

Good luck to all concerned.

Comments (110) + TrackBacks (0) | Category: Business and Markets | Current Events


1. petros on February 4, 2010 7:39 AM writes...

From the press release
"We are also looking to reduce R&D infrastructure costs.
Today we have announced an expansion of GSK’s restructuring programme to deliver
additional annual pre-tax savings of £500 million by 2012 (R&D 50%; SG&A 50%). A
significant proportion of these new cost savings will be generated through reduction of
infrastructure. Approximately 70% of these new savings will be directed to the bottom line to
enhance profitability."

"We are proposing to cease research in selected disease areas.
Today, we have announced proposals to cease discovery research in selected neuroscience
areas, including depression and pain. These proposals are subject to consultation. We will
focus research activities in neurodegenerative and neuroinflammatory diseases (such as
Alzheimer’s Disease, Multiple Sclerosis and Parkinson’s Disease) where we believe the
prospects for successful registration and launch of differentiated medicines are greater."

"Today, we are creating a standalone unit to specialise in the development and
commercialisation of rare disease medicines. The profile of investing in this area is attractive
for several reasons."

Sounds like the end for the nearly empty Harlow site

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2. AharlowScience on February 4, 2010 7:46 AM writes...

Neuroscience to close and GSK to exit the field, Verona, Tonbridge, Harlow, Zagreb and others all to close. All jobs to go, support functions to relocate or close.

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3. BaldonARSE on February 4, 2010 7:55 AM writes...

I'm shutting Harlow.
Hope no one remembers how much I spent doing up my office there recently !

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4. Shocked on February 4, 2010 7:56 AM writes...

Holy sh*t. Is that true #2?

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5. Gone_in_a_Year on February 4, 2010 8:17 AM writes...

#4 Its True.

If you really want to realize the extent of how fast this (mis)management team is running from its duties try googling the following terms

GSK Foodle

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6. Anon on February 4, 2010 8:34 AM writes...

The question was asked at the Harlow meeting 'Will any of the projects in Pain/Cognition resurface in China in a while?' and the answer was 'Yes, some will probably resurface'. So not quite the exit from Pain and Depression that has been stated, more the movement of resource from Europe to China.

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7. stuff on February 4, 2010 8:35 AM writes...

"We have ‘externalised’ approximately 30% of GSK’s discovery research."

Says so much.

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8. Anon@GSK on February 4, 2010 8:44 AM writes...

Site closures are as above plus Mississauga (Canada) and Poznan (Poland). Only the 'Neurodegeneration' bit of Neuroscience has survived (Shanghai).

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9. WindPharmer on February 4, 2010 8:46 AM writes...

Enough moaning and whinging and whining everyone! GSK is funniest place in the whole world. Gone are the days when we were run by crusty old Nobel laureates and boring boffins. Now we’re run by the greatest cast of comedians, clowns and jokers in corporate history. Why even our CEO is called “Witty”. We’ve got some great magicians and conjurers who can make people, money, projects, even whole sites, disappear into thin air. They can, it seems, even make whole departments disappear only to re-appear on the other side of the world. With Moncef, a real “Comical Ali”, and Patrick, straight out of “Monty Python”, we’ve surely got the best comedy double act in the business, better than “Dumb and Dumber” or “Laurel and Hardy”. The chemistry between them is so great that we don’t need any old-fashioned chemistry anymore. Admittedly, we may have produced our share of turkeys in the last decade but with this Sitris deal we’ve surely got the $700 million comedy blockbuster of the decade. Everyone is laughing, even the shareholders! If laughter is the great cure, who needs drugs!

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10. Jose on February 4, 2010 8:51 AM writes...

"We have ‘externalised’ approximately 30% of GSK’s discovery research."

Everyone remember the combichem "Lost Decade?" This little industry wide fiasco is shaping up to make that look like a frolic in the park with a pretty girl....

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11. Anonymous on February 4, 2010 9:09 AM writes...

Sold the site already?

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12. MTK on February 4, 2010 9:09 AM writes...

Are the sites themselves, including any development functions at them, closing or is it just the discovery portions?

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13. Anon@GSK on February 4, 2010 9:15 AM writes...

#12 The sites are closing - still-required functions will be relocated to other sites

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14. Anon@GSK on February 4, 2010 9:19 AM writes...

#12 A couple of buildings on the Harlow South site are being retained

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15. Anon on February 4, 2010 9:33 AM writes...

Pharm Tech and Pharm Dev at Harlow are staying put. All R and D to close. Regulatory etc to relocate to other sites.
The Porton Down thing is probably a move to the old Merck Terlings Park site.

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16. FormerGSK on February 4, 2010 9:39 AM writes...

Tragedy. I knew of good people in Verona, UK and Mississauga. Now their lives are thrown into chaos because none of the great geniuses at GSK can figure out how to actually run things. Hell why not close all of R&D. Then Witty, Moncef, and Vallance can get into the lab and make some drugs.

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17. Gil Roth on February 4, 2010 9:39 AM writes...

FWIW, my new interview with the head of their preclinical semisorta outsourcing group Scinovo is here.

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18. quintus on February 4, 2010 9:59 AM writes...

I agree with formerGSK, this is a disaster. I feel for all those who must go, I hope it works out somehow for you all.
I'll make no comments about the GSK leadership, enough has been said above.

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19. Anon ex-GSK on February 4, 2010 10:02 AM writes...

What is really amazing is that all of this is going down in the midst of what appears to be amazing profitability. 4Q09 profits were up 66% year-over-year and 20% for the whole year. Dividends have been raised. Even the consumer business was going well, and those poor folks haven't had a real bonus in years.

Still, when you look at product sales, GSK has just a few small molecules meeting the traditional blockbuster definition. And of those, Avandia has been under assault from Nissen's worthless meta-analysis for years, and Valtrex is off patent. Today's announcements have to be laying the groundwork for dealing with the problems of tomorrow rather than today.

So much for the three-year plan and non-interference directive from management that was rolled out less than 18 months ago. You could not ask for two more incompetent people to be running your R&D drug discovery than Slaoui and Vallance. Vallance is an academic who had zero days of industry experience when he took the job, and he has--as expected--gone gaga for pop science (witness Sirtris) and is slowly driving the whole research effort into the ground.

Best of luck to all my former colleagues. There is life after GSK. It is a great place to be from, if not at.

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20. Bradman on February 4, 2010 10:42 AM writes...

Another former GSK guy wishing all my old colleagues a sincere "good luck" in the coming months. Sad to see an R&D organisation with so many good people and so much science brought so low by the two people already mentioned. They excel only in the dark arts of deceit and mendacity. As the previous post stated, there is life after GSK. But will there be life in GSK when these two jokers have finished their handiwork?

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21. PlanB on February 4, 2010 11:16 AM writes...

A previous posting to this site gives some insight into some of the problems there, ex-employees are not always the most reliable in their judgements but some of this certainly chimes with previous gripes both here and elsewhere:

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22. Anonymous on February 4, 2010 11:32 AM writes...

Does anyone ever get the feeling it's a race to the bottom? One company after another following the same strategy - what if the strategy is wrong? How this industry will look in the future I fear is not pretty. Good luck to all those involved.

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23. Skeptic on February 4, 2010 11:50 AM writes...

I am reminded of a certain Soviet dude who said that if the scientists failed to make the bomb, "we would just shoot them".

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24. Dr Bop on February 4, 2010 12:02 PM writes...


Neurosciences Drug Discovery: to very significantly refocus our drug discovery efforts in neurosciences, away from anxiety and mood disorders, depression, pain, schizophrenia, and sleep. Activity in neuroinflammation and neurodegeneration will be retained. The Neuroscience Medicines Development Centre will continue to focus on delivery of the existing late stage pipeline as well as on the current discovery assets in early clinical evaluation. These assets will be progressed and resourced into late stage based on the outcome of clinical studies and subsequent decisions made at Portfolio Management Board (PMB).

Verona, Italy: to stop all central R&D activities on the site. Late stage clinical operations and medical support for the local operating company would remain. Verona will remain the headquarters for GSK in Italy and other GSK activities on the site are not affected by these proposals.
Harlow, UK: to stop all neurosciences drug discovery activity on the site, and exit all facilities except 2 buildings on the South Site which will house Pharmaceutical Development and Molecular Discovery Research sample management.

Tonbridge, UK: to stop all R&D activities and close the site.

Poznan, Poland: to stop all central R&D activities on the site. Other GSK activities on the Poznan site are not affected by these proposals.

Mississauga, Canada: to stop all Pre-clinical Development activities on the site. Other GSK activities on the Mississauga site are not affected by these proposals.

Zagreb, Croatia: to transfer macrolide drug discovery to the Immuno-Inflammation CEDD in Stevenage and stop all central R&D activities on the site. Other GSK activities on the Zagreb site are not affected by these proposals.

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25. EX TERLINGS PARK on February 4, 2010 12:09 PM writes...

Sorry to hear that bad news I know how your feeling
been there and done that in 2005 at Terlings Park Harlow.the good news is that TP is about to be emerge from the Ashes ,as HPA buy the site ,the bad news though is for the guys at Porton Down who will
loose their jobs when they relocate to Harlow.
good luck to everyone who looses their jobs.

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26. g on February 4, 2010 12:25 PM writes...

The whole industry is scared sh#tless. Productivity has not been good for over a decade. The blockbuster drug business plan is gone. Who knows how the push for comparative efficacy will impact reimbursement and market share of new drugs? Everyone is predicting huge decreases in sales/profits of branded drugs in the near- and long-term. Hence the mad rush for consumer products, animal care products, generics, and emerging markets.

I haven't even entered industry (still in grad school) and I am seriously thinking that "industry" might not be a good place to start a career right now, or even in ten years!

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27. oldtimer on February 4, 2010 12:58 PM writes...

The statement about projects resurfacing in China says it all. Having shifted neurodegeneration to China they would not dare to close that even though it can be argued that NDG is the riskiest part of CNS. Nest question, how do you manage something n thousand miles away and how safe do you think your IP will be?

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28. CD on February 4, 2010 1:04 PM writes...

just found out today I'm one of the thousands to lose my job. Had a video presentation from Moncef saying we'd all get through this together. What a joke!

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29. PharmaHeretic on February 4, 2010 1:20 PM writes...

A system that rewards short term profits created through fraud and "rules" will ultimately eat itself. MBAs, lawyers and incompetent managers are really a symptom of a more systemic problem, namely financialism. A system that games money to make more money, without any real increase in productivity, will by necessity be disconnected from reality.

They are not interested in reality, because they can believe in their own shell games. Ironically many people who are hurt by such shell games also believed in them till it screwed them over.

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30. EX TERLINGS PARK on February 4, 2010 1:23 PM writes...

yes I remember Chris Morris our MSD Head of site saying at our Meeting "Change is good "
well thats a bunch of CRAP ,and these people who retain there jobs should be more sensitive ,because they are part of the corporate machine which brain washes us with their Management speak ,which is useless to us when we have to go and get totally different jobs . so if you are one of these people please think on when you have to give the Bad news ,we even had a guy come over from the states pointed the finger at the scientists blaming them for the site closure ,which almost ended in him being linched and was only saved by his five minders who MSD obviously thought this guy would put his foot in it.

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31. Hap on February 4, 2010 1:26 PM writes...

#28: I'm sorry. I unfortunately have Rollins' Band's "Liar" running through my head when I hear the quote from your management.

Can't imagine why.

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32. processchemist on February 4, 2010 1:44 PM writes...

I sadly remember that less than 3 years ago some people in Verona did not see the new Shangai CEDD as menace to their job...

I'm asking myself who's really pulling the strings in this industry. The management or funds and banks?
Once upon a time the pharma industry was "creating value" through R&D. Now I understand that creates value (?) cutting jobs. If research output it's not predictable, the limit of the present business model is obvious: you can't count on infinite cost cutting rounds. And you can't think that many spinoffs will rise from the ashes taking the risk of R&D... from what I hear the climate in the business angel/seed/vc field it's still pretty bleak...

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33. Pleasemakeitstop on February 4, 2010 2:55 PM writes...

So, this decision was driven by market forces? 2000 staff were due to fly business class to a huge HR leadership training jolly in Atlanta on Monday. Now that's obviously a vast waste of money. It's also a good thing for managers to be with their staff so it makes sense to call it off. But why cancel it at 11pm on the previous Friday? It smacks of panic measures. But why, when the financial results weren't that bad? Either it was a rushed decision to prove that if AZ can do it GSK can too, or it's yet another example of the incompetence of the top few layers of GSK management. I don't know which is worse.

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34. MedInformaticsMD on February 4, 2010 3:13 PM writes...

# 28 CD

just found out today I'm one of the thousands to lose my job. Had a video presentation from Moncef saying we'd all get through this together. What a joke!

At least you didn't have to take the "how to do a layoff of your staff" training program as I did as a Director in another company, just before I was laid off myself.

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35. MedInformaticsMD on February 4, 2010 3:20 PM writes...

#30 Ex Terlings Park:

these people who retain there jobs should be more sensitive ,because they are part of the corporate machine which brain washes us with their Management speak ,which is useless to us when we have to go and get totally different jobs

Employees who belive the mgmt. rhetoric fall into one of two groups: those who believe it or are comforted by it, and thus are deluded, and those who don’t believe it, but cannot speak up due to fear of retaliation or layoff, and thus may easily become demoralized and cynical.

Environments of the deluded, demoralized and cynical are not the best for leading-edge drug R&D.

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36. GSKeptic on February 4, 2010 3:20 PM writes...

So far the impact on the US sites sounds remarkably minor- that's a surprise because it's so much easier to lay off Americans that foreign-based companies usually can't resist. Am I mistaken?

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37. Noncef on February 4, 2010 3:29 PM writes...

A Message from the Great Leader

"First of all, I'd like to say thank you to all of the little European scientists for your sacrifice. Yes, I feel sorry for you, but really you should feel sorry for me, because today has hurt me more than it has hurt you. Please understand why I had to do this. The share price is 32 cents lower today than it was yesterday, and I know you'll agree that your jobs are a price worth paying for success like that. Look on the bright side, my former employees - after all, it isn't as if your opinions or jobs were worth as much as academic clinicians! We are living through difficult times, and we need to save money, to create value for our shareholders by following our new R&D strategy. As you know by now, this means investing in cutting-edge biotechnology companies run by our Harvard buddies, whose boards we will move to when our time in GSK is over. One day you'll realise that we were right so just stop complaining about it! Please don't think that you haven't been appreciated. I couldn't have afforded all this, or even have acquired so many mistresses, without you. I feel your pain. Think of me over the next few months as you see my grinning face on your homepage. Farewell!"

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38. Teoz on February 4, 2010 3:33 PM writes...

Yes it's damn real, the Research and Development unit of Verona will be closed at the end of year with the IT unit. About 600 employees have lost their jobs ... and i am one of these unlucky workers. I hope that the Italian government do something for us!

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39. David P on February 4, 2010 3:34 PM writes...

Local reports here in RTP only say GSK layoffs "may" include RTP, which is not very helpful. Seems like those guys have been reorganizing annually, with a threat of lay-offs always there. I really thought the last round had cut it all the way down (they were even hiring people for the Pfizer anti-HIV joint venture).

So is there any good news in the industry? It is getting a little depressing dropping by this blog at the moment.

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40. If only on February 4, 2010 3:34 PM writes...

Wonder what would happen if 1000 shareholders who also happen to be employees turn up at the next shareholder's meeting and demand a vote of no confidence in the board?

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41. Radical on February 4, 2010 3:49 PM writes...

It's sad that large companies like GSK feel they can dump thousands of hard working people on the scrapheap in times like these. I for one will be showing my displeasure by actively boycotting all GSK consumer products ( feel free to join me. And if China cares maybe stop buying aquafresh etc?

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42. LargerView on February 4, 2010 4:05 PM writes...

Taking a bigger picture view here, how many scientists have been lost from the industry in the past 5 – 10 years? Are all those that have been laid off, or are being laid off re-emerging in smaller companies, or as consultants within the industry? Most importantly what is the net impact on the industry pipeline? Is the pipeline simply shifting its volume from large to small companies (spreading the risk), or is the pipeline concurrently shrinking as the risk is spread? If the pipeline is shrinking, how will this affect the quality of life of the patients the industry serves? How visible is all this information within the ongoing attacks on the industry by governments and the media?

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43. Anonymouse on February 4, 2010 4:06 PM writes...

I'm another one who got axed today. In some ways I feel relieved that I don't need to worry about whether I have a job or not anymore and that my hand has been forced into finding something better to do with my life. GSK is drifting at sea with a broken rudder and the iceberg is approaching rapidly. Now glad to be in one of the lifeboats! I'll miss the guys I work with but I won't miss those two clowns running the show. Actually, I don't think I'll miss pharma either if that's the way things turn out.

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44. sympathies on February 4, 2010 5:45 PM writes...

Sorry to hear about fellow industry mates losing their jobs.

Stupid idea -> if those who've lost their jobs can band together, how about a starting up a drug discovery venture yourselves?

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45. anonymous on February 4, 2010 6:49 PM writes...

I suggest that you investigate the layoffs that are happening at sanofi-aventis this week. About 40% of the staff at the Cambridge site was told they had jobs on Monday and was laid off Tuesday. News of who was out of a job leaked in one of the research departments on Tuesday, so other departments had to spill the beans, as well. Maybe this is how it's done in France, but it doesn't go over well in the US, even with those who have the option to stay. Apparently, more layoffs will be announced in April with many more to come 4Q10.

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46. GSK on February 4, 2010 8:40 PM writes...

regarding lack of lay-offs in US:

Today (Thursday) was Europe Day for GSK's announcements.

Tomorrow will be US day for GSK's announcements.

-the neoursci cuts in Europe will also impact US

-some speculation is that inhalation product dev't will be cut from US and moved to UK, small molecule devt will leave Philly and go to RTP, Philly will focus on biotech

US hasn't been (and won't be) spared....

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47. ex-GSK'er on February 4, 2010 10:31 PM writes...

To those impacted,

My thoughts are with you. Though formerly GSK-US based, I worked with many in TON, VER, and HAR. Alot of good folks there.

-from an ex-GSK'er who "survived" multiple rounds and couldn't take it anymore..

#46: I would not be surprised if IPD went to UK, but I always had a feeling (not info - just my opinion) that if PCD activities would be focused on one US site, it would UM/UP b/c of the scale up facilities there, but I will be following closely despite the fact that it makes me ill to keep hearing of cuts there ...
Good luck everyone.

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48. WedThurFri? on February 4, 2010 10:59 PM writes...

This is why the pharma industry is doing all t