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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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« Sirtis Gets Shut Down in Cambridge | Main | Getting Down to Protein-Protein Compounds »

March 12, 2013

Is GSK Up to Something Else, Too?

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Posted by Derek

The news about Sirtris prompts me to mention something else that I've been hearing about over the last few days. More than one source has told me that GlaxoSmithKline is thinking about doing some other rearranging/staff cutting, but I don't have enough detail beyond that to elaborate. I wonder if today's Sirtris announcement is part of such a move? At any rate, one of the places where these stories seem to be going around the most, naturally, is inside GSK itself. We'll see if any more announcements come in the near future.

Comments (36) + TrackBacks (0) | Category: Business and Markets


1. Anon on March 12, 2013 11:56 AM writes...

The shareholders should consider suing GSK for mismanagement / institutional malpractice.

Scientists cannot discover new drugs when on constant fear of being put on a breadline.

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2. Hap on March 12, 2013 12:20 PM writes...

1 - you're probably right, but not because they don't care about their scientists, but because I'm not sure they care about finding drugs at all. Pharma seems to have given up on finding drugs, and if that's the case, then companies are choosing a way to liquidate that helps the few (with connections) get out with their investments intact, while long-term investors take it in the shorts. That ensures that not only do we get the insider-trading market that some people have advocated, but we also get major disincentives for anyone but big trading firms and computers to invest (why invest for the long-term if someone else makes the profits and if your investment won't help make something useful or even try, and why invest for the short-term when insiders and computers will leave you holding the bag?).

The way pharma is behaving, no one but upper management, trading banks, and their friends do well. Patients don't get drugs, (non-management) people don't get paid (or get paid much worse), the people who would have helped develop drugs go into to investment banking instead, everyone loses the institutional knowledge that could have been used to make better drugs, and other countries learn to make drugs (badly).

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3. pharma professional on March 12, 2013 12:20 PM writes...

Most R&D activities in the northeast are consolidating to the Upper Providence site (Philadelphia area). The UM and Rennaiscance sites also in the Philly area will close down, and migrate to Upper Providence, which will grow accordingly (there's definitely space). So Upper Providence and RTP will be the main US R&D sites. Message is that it's about creating increased interactions, improving sustainability, and not about jobs. Actually makes sense - lots of empty space at each site.

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4. anon2 on March 12, 2013 12:47 PM writes...

#3: "Message is that it's about creating increased interactions, improving sustainability, and not about jobs."

Yeah, if you really believe that one.....want some swamp land or the Brooklyn Bridge?

Remember, SIR ANDY said after the last poor quarter's report that the company needed to save more money (yet again). It will take at least two years to make new bldgs and needed labs at UP, which is plenty of time to decide who will not be around by then or which functions will migrate to the UK.

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5. emjeff on March 12, 2013 1:21 PM writes...

#4, anon2 - You're kidding about moving to the UK, right? The land of ridiculously high taxes and socialism? Get a grip...

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6. Riverside on March 12, 2013 1:47 PM writes...

#5 The Economist estimates of the US and UK effective tax rates in 2012 based on a $100,000 income were 27% and 32% respectively. Higher for sure, but ridiculously so?

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7. Hap on March 12, 2013 1:56 PM writes...

Also, isn't the UK following the Republican playbook for lowering the deficit? I don't know whether it will be better than the status quo in the long term, but it sure doesn't look good now, either on the economy-stimulating or the deficit-reducing fronts.

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8. pete on March 12, 2013 2:44 PM writes...

Rumor of yet more GSK re-org prompts something I'd really like to see: a graph that compares the current half-life of PhD scientists at different Pharmas. One of those closely guarded HR factoids, no doubt.

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9. Anonymous on March 12, 2013 3:10 PM writes...

There are lots of good scientists @GSK. Some of the managers are good too and Witty is a real improvement over his predecessor. Unfortunately, the people who run R&D and who in their wisdom bought the steaming pile that is/was Sirtris are still there and still calling the shots. One of them even got a better bonus than Witty this year. It's beyond satire!

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10. Diver dude on March 12, 2013 3:10 PM writes...

#7 yes they are and it's an economic and political slow motion car crash for the current administration. Be prepared for a metaphorical screeching of brakes and discreet U turns as they finally realize continuing with the current plan will get them thrown out of office in 2015. I wouldn't expect them to do the right thing for a smart reason but they will coincidentally do the right thing for the expedient reason of saving their collective a$$es.

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11. Ola on March 12, 2013 3:16 PM writes...

#3: There's lots of empty space at nearly every GSK R&D site so I'd expect more consolidation. Not much comfort to be found in circling the wagons once again...

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12. Curious Wavefunction on March 12, 2013 3:26 PM writes...

#1: The short-sighted shareholders are as responsible as anyone else for putting scientists on a breadline.

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13. watcher on March 12, 2013 3:39 PM writes...

I actually don't think that shareholders are as short sighted as you might propose. Watching the stock price stay flat whent the entire market continues to move up, seeing the stock do nothing despite paying over 5% in dividend as overall bond rates stay ridiculously low, seem to be speaking over loudspeakers that GSK is not worth any type of premium pricing or increased sales/profit growth. People simply are not buying the stock as there is no where for it to go, no driver for company growth, no future except ongoing sownsizing, squeezing spends and costs. Sir Andrew doing a good job? I hardly think so. He's more interested in looking good to the British elite than in jobs in keeping jobs in the US.

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14. gippgig on March 13, 2013 3:43 AM writes...

Off topic, but the Washington Post newspaper ran a front page story on questions about genetics research done at Johns Hopkins (

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15. AJ on March 13, 2013 5:16 AM writes...

As an x employee I’m amazed that any drugs come out of GSK given the money and time it spends preventing such occurrences.

The whole setup is fundamentally flawed.

The flaw basically being as an employee every minute spent directly trying to create or generate data on a new drug puts you closer to redundancy. Every minute spent in self-promotion and side projects (preferably ones you can fix the outcome to) brings you closer to promotion.

Tips to doing well at GSK
1. If it works fix it.
2. Minimise time spent in the lab it won’t be rewarded.
3. Reinvent the wheel, add sparkles to it and call it the efficient movement solution.
4. Speak up at meetings yes this pre meeting dragged on for 3 hours but you can still raise you departmental profile by asking a few more pointless but intelligent sounding questions.
5. Don’t manage your underlings make them manage you this will free up more time for meetings, side projects.
6. If you have a really good idea delay it until it can be worked into your next set of goals and objectives. (same goes for candidate selections if you hit this year’s metric)
7. Short termism is key remember IBGYBG (I’ll be gone you’re be gone) and NFP (next F****** problem).
8. Reorganise, reorganise, reorganise. Yes it cost money and messes up people lives but it will save money in the future (Don’t worry you don’t have to achieve you predicted savings because it’s time for the next episode of “Reorganise, reorganise, reorganise” before such an occurrence.)

Any one got any other tips?

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16. RealityCheck on March 13, 2013 5:45 AM writes...

Dear AJ,
You sound like a disgruntled ex-employee. There are a number of those around who seem to spend their time carping about GSK. It's obvious that their real beef is with how well the company is actually doing. This obviously grates with them so they spend their time seizing on every even slightly negative story they can find. GSK has moved on to a much better place in past few years, I think you should try to do the same! You and that other buffoon #9 are quite obviously talking about a company and a way of doing business that really has been displaced though I'm not sure it ever existed in the first place but maybe you guys have had different experiences. The company has had a complete re-boot since 2006, it's science and integrity that now take centre stage. The policy of backing science while retaining and recruiting the best talent is starting to pay real dividends in terms of the pipeline. Just watch this space to see how things play out. Some embittered ex-GSKers may not like what they'll see

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17. Another buffoon? on March 13, 2013 6:47 AM writes...

As a redundant and retired ex-employee, who is not
embittered but certainly grateful that he left when he did, I would point out that there is little or no evidence that GSK is "doing well". Given the time lines for drug development, any re-boot since 2006 will have had little impact yet and any buffoon should understand this. As for science and integrity taking centre stage, one only has to consider the ridiculous investments in Sirtris and ELT to realise how fatuous a claim this is.

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18. AJ on March 13, 2013 7:51 AM writes...

Dear RealityCheck

Yep Im probably a bit embittered I just found the level of waste (in terms of money and people) to much so I opted for redundancy.
Id rather not see the company fail that wont benefit anyone. Especially as my old job has been outsource to the company my wife works at, the real kicker is she get paid more to do it than I did :-)

As for changes Im not sure they are company wide only last month I met up with an old placement student of mine. When I asked about work load in the lab he said "I dont get in the lab much anymore I supervise two placement students, Im writing a lot of papers there is a drive for that now"

This is an intelligent guy whos been out of university for 4-5 years and will do very well since he is already out of the lab and doing side projects.

Finally the size of the pipeline is a useless metric without knowing its quality but you could be right the witty changes could be the magic company structure that produces new meds that people/governments will be willing to pay for. I really hope this is the case but I suspect even if it is the next guy will still turn up and reorganize it.

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19. exGlaxoid on March 13, 2013 8:36 AM writes...

There are a lot of ex-GSK employees, mostly due to the poor management of GSK. In my experience, Glaxo and GW were fairly well run companies, with reasonably good business models. The merger with SKB was a complete disaster for GW, as SKB brought along almost all of their problems. As well, most employees are/were stockholders who have lost much of their investment in the stock, which has been terrible.

One was the "R & D as a factory" model which wasted millions on building 2 large research factories, which closed a few years later when it was realized that R & D was NOT making widgets. The SB R & D management was a complete waste.

Then they brought Avandia and Paxil, both of which looked good, other than their eventual lawsuits and other issues. Plus manufacturing issues caused by trying to cut costs too much. I don't recall any previous Glaxo or BW issues. And lastly, the SB sales/marketing culture, which may have also been present at GW to some degree as well, which resulted in $3 Billion in fines.

So I don't see why someone from the GW side would not be unhappy that a decently well run, profitable company was ruined by a reverse takeover by SB, which is the way many people see it. And the fact that the most productive people in research* were almost all let go, while spending billions on Affymax, Sirtris, Pracis, and other magic beans. *The RTP oncology group got THREE drugs to market with only 20 chemists in 10 years, all of whom were let go, despite being the most successful group in the company. Note: I was not part of that group, but if they were cut, no one was safe.

So if a company lets go of many of their best people, outsources work to hacks, hires many foreign workers in the US, gets fined billions for FDA and marketing violations, spends more billions on poor R & D purchases that their own people advised against, and rewards their management for low profits and bad decisions with million dollar bonuses, I can see why their ex-employee shareholders might be unhappy.

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20. Fred on March 13, 2013 9:05 AM writes...

I think Hap (#2) nails it exactly; Pharma has mostly given up on new drugs, but for the "treat everything with an antibody" snake oil they sell the gullible.

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21. Anon on March 13, 2013 10:22 AM writes...


When you use the ad hominem and discredited term "disgruntled" you come off as either a GSK shill, and/or someone who's described in the new book "Assholes - a Theory" by Aaron James.

Google it.

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22. RealityCheck on March 13, 2013 10:44 AM writes...

Dear #21,
I guess your definition of a shill or an AH is anyone who doesn't go along with the standard narrative of "All GSK Senior Management Are Bad/Useless/".
The real point is that many, but certainly not all by any means, former GSKers are not exactly unbiased in their criticisms and seize about any opportunity to vent their collective spleen.
I do not for one moment believe that this has had any effect on the people whom are the targets of the said spleen, quite the contrary, I think it has galvanized them. Tough times require tough choices. In the early days, post-merger, the company put a lot of effort into technologies that simply did not deliver, remember the "omics" revolution1 What a busted flush that turned out to be! Someone had to call time on this massive waste of resources and re-allocate effort where it was needed.

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23. John Wayne on March 13, 2013 11:52 AM writes...

@8: It has been my experience and observation that the time of a PhD scientists career in big pharma is measured and designated as an LD50 (rather than t1/2).

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24. anon on March 13, 2013 11:59 AM writes...

#22: From someone who left on their own, not "forced out" and have been very grateful for the GSK health coverage I still get, you are right on several points such as the waste in areas as "omics". But today's crew of those in charge are no better, in that they always know better than those in the GSK labs, and/or who have had much more experience than those in top tier who have never made a drug and have no track record of even good academic science. The DPU system has no way of really doing early, new target identification, that is, there is no way to discover new targets of the future. Much of what is being "approved" today as new research comes as "me too" approaches in following other companies. Also, many of the drugs in development that are being touted in new NDAs coming soon are "me too's", not even 2nd, or 3rd, but maybe 4th and 5th to the market, if that good, with little to differentiate from those already being marketed. Little money to be made there. So how to they decide to fill the gap for new targets that would be the next generations new drugs? This is being done through "searching" academic labs. And that almost certainly will be a disaster. Places like Harvard will be glad to talk to you, take your money, but very seldom actually deliver on anything that you want them to do, and industry never has recourse as they then look as if the professor cry out in the press that the mean company is stifling academic freedom etc. It's completely no win. And then there is the initiative undertaken by this current crew of upper bosses of doing "new drug" identification by buying from biotechs. GSK has an absolute abysmal record in this approach, with the absolutely mother-of-all-time example of a screw up in the Sirtris deal. GSK will never recover the hundreds of millions spent on that one. Never.

Wasted resources, indeed that has been and continues to be true. But this group of "leaders" do not provide any credible vision. So many people, inside and out, snicker, at best, and are fearful at worst. Even the stock investors are not convinced. Your naive optimism simply won't win the day that GSK needs for long term recovery, let along growth.

It just won't happen.

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25. Hap on March 13, 2013 12:03 PM writes...

Corporals and sergeants getting shot for following generals' orders doesn't exactly sound like a new way of doing business, though. If you wanted to not waste large amounts of money, not buying Sirtris (despite what were likely lots of complaints and a lack of internal validation) would have been the best move. After having done so (and given the inability to unring the bell), everything else is window dressing unless you can correct the management errors that led to the purchase in the first place. It might also be nice if the people who made the mistakes actually paid a price for them.

Unfortunately, the relevant part of the "disgruntled (ex-)employees'" claims is the lack of willingness to listen to your employees (hint: calling them disgruntled doesn't correlate well with that), which is at least of some of what needs to change. The number of ex-employees with the same complaints also doesn't give a lot of hope.

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26. RB on March 14, 2013 3:39 AM writes...

GSK always seems to get more of a bashing here than other Pharmas. They are clearly alive to this, evidenced by their use of PR shills (Agilist, where have you gone?).

Are they genuinely worse than the others in terms of R+D management/HR/outsourcing/buying in or is there an anti-Brit bias?

I'd be interested to hear everyone's views on this (especially Derek, although this might be a bit difficult for you, as we board readers are mostly hiding behind a cloak of anonymity...).

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27. MoreGSK on March 14, 2013 8:20 AM writes...

GSK had a very large group of chemists who made cmpds to enhance the HTS collection and who also did all HTS hit to lead work (called MDR). This group was separate from the med chem teams that would take the hits further along through LO. This group of chemists was largely laid off around the same time that sirtris and praeics was bought around 2007. Some of these chemists believe that they were laid off in exchange for buying these two companies. Of course, this doesn’t make much sense. MDR was going to be shut down regardless. Actually a handful of GSK chemistry positions were saved by the purchase of Praecis. GSK seems to have an abundance of chemists that they don’t know what to do with, and they keep tossing more and more of them on the Praeics ELT program to give them some work to do. The vocal chemists on this blog, and there’s really just a few of them, seem to be from the old MDR and they strongly dislike Sirtris, Praecis, and GSK management. They also seem to have a frothing at the mouth hatred of combichem. This is especially weird since, guess what, combichem employs chemists! Reading all the x-GSK comments, what strikes me is how little of them seem to know about the sirtris or praecis purchases. For instance, would anyone like to guess how much praeics was bought for?? Because it wasn’t much.

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28. RB on March 14, 2013 8:50 AM writes...

Thanks, MoreGSK. That does make sense-and it's what I'd thought was the case.

The Sirtris story is a great one. Waiting to see the denouement-I guess anticlimactic as everything is quietly shelved. However, sirtuin biology looks very interesting....

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29. dangermice on March 14, 2013 9:13 AM writes...

Precis: bought for $35M, still alive and kicking
Sirtris: bought for $750M, to be shuttered.

Which one do you think cost more jobs?

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30. Hap on March 14, 2013 9:53 AM writes...

I was under the impression that other pharmas got drilled here on a regular basis - particularly Pfizer, whose reputation seems to have fallen to a cross between the Borg and the aliens from Independence Day. In addition, I think some people here have an allergy to spin - when you need to have PR people explaining that all the criticism of GSK's internal/external politics is the fault of one set of fired chemists or "disgruntled employees", well, one is led to the conclusion that GSK's reputation needs help desperately (and probably not that kind of help).

I don't think most people have axes to grind against GSK - if it can find a way to produce drugs, lots of people will be happy, and if it can find a way to actually employ chemists, people here will be very happy with them. However, the apparent connection/coincidence of their layoffs and the expensive (and allegedly ill-advised) purchase of Sirtris is a sore spot for lots of people and a rather neat summary of what lots of people see as wrong with pharma management. It would probably be our version of what Vioxx is to lots of other people. If you haven't been employed by them and had little other information to go on, that incident would not necessarily lead to a positive view of GSK.

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31. Anon on March 14, 2013 6:38 PM writes...

#22 Reality Check

"I guess your definition of a shill or an AH is anyone who doesn't go along with the standard narrative of "All GSK Senior Management Are Bad/Useless/"."

You 'guessed' wrong.

"Disgruntled" is a defamatory term with many negative connotations and a favourite of corporate HR and other apparatchiks. Its use throws its user under distrust.

So are straw arguments such as you've just made above.

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32. Anonymous on March 14, 2013 6:40 PM writes...

#31 that should say "So do straw arguments..."

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33. Anonymous on March 15, 2013 12:26 PM writes...

#27 moreGSK - Actually, half of Metabolic and ~2/3 of Cardiovascular and all of Oncology at RTP were also laid off during that same period, myself included. Don't forget about all of them. So, I think it's just the sheer volume of people that were shelved over so many years and reorgs that supplies the pool of animosity. And I can tell you that most of these people never recovered financially or professionally from being laid off either. There were no greener pastures to go to. Those layoffs ruined countless really smart, really productive scientists lives.

Personally, I would have been much better off if I had been one of those people who took the afternoon off to go play golf with my VP on company time because all of them were retained. I don't play golf but at least I can still look at myself in the mirror in the morning, albeit from the bathroom of my dingy apartment.

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34. an ex-GSKer on March 15, 2013 7:21 PM writes...

#33, being in a similar situation with GSK, I have to concur with your comments. When I left, I met with my Sr. VP, someone who I had known somewhat on a personal level for years. The first thing out of his mouth, without even letting me explain why I was there, was an attempt to allow him to escape any responsibility from the outcome in saying the decision not been in his control, trying to run as far away as possible from the deed. Of course it was an excuse, we both knew it Then, he tried to make some small talk, asking if I was given a good deal. With that I began to get annoyed. My response was that it represented the standard package, which it was, that I did not benefit from any of the enhancements, and that the entire package was not adequate compensation for the number of years I'd spent in GSK along with the effects it would have in pulling the rug out from the investment made with a career at GSK. On that, he had absolutelly nothing to say, not even a thanks for all the years of contribution. Total lack of any class. Ironically, I had not gone to his office to get an explanation or excuse, but to ask if he knew of other opportunities as he had many connections outside of GSK.

Well, he is still there, still making excuses to staff, moving around people in boxes to make it look like he's being strategic and up to date, not really doing anything different toward actually getting new products.

I have not seen or spoken to him since that last interaction. I've been able to cotinue with work in science, but the full extent of my career has not recovered and is unlikely to ever be the same. I know many others who have had the same fate, and quite a few who have decided to start over, not staying with their love of science which has led them to the many years investment in trainig.

After leaving, I was approached a few times by members of my former working group, asking for help on this problem or that. I would have been very glad to help them, but that there'd have to be an official agreement with GSK with appropriate compensation at a fair, market rate. The VP would have been happy for me to give help under the table for no fee, but not under an agreement with an appropriate compensation. They are still stuggling with the same problems, from information that periodically comes around. Today, I can just sit back, smile at the entertainment.

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35. Annonn on March 16, 2013 6:13 AM writes...

#1) those at start ups do it (lets not include sirtris in that group)

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36. lessismore on March 16, 2013 9:04 AM writes...

@27, MoreGSK: "GSK seems to have an abundance of chemists that they don’t know what to do with"

Hollow laughter. You, sir, are clueless, and your comments risible. As for the benefits of the Praecis pipeline? Sorry, been there, done that. It's Affymax all over again.

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