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February 4, 2010

More R&D Cuts From Big Pharma

Employment: GSK, AstraZeneca, Pfizer slash research jobs, spending

Lisa Jarvis

Amid cutbacks, GSK has upped its activities in biologic drugs. GSK GSK
Amid cutbacks, GSK has upped its activities in biologic drugs.
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Seeking to improve productivity and offset the impact of generic competition, major drug companies GlaxoSmithKline, AstraZeneca, and Pfizer are making more cuts to their internal research operations.

In announcing earnings last week, GSK said it wants to carve $800 million out of its cost structure by 2012; half of that amount will come from R&D. Though the company isn’t specifying how many jobs will be cut, it does say the bulk of the savings will come from a "reduction of infrastructure."

GSK has proposed ending R&D activities across several sites, including Tonbridge, U.K., which is expected to be closed; Verona, Italy; Zagreb, Croatia; and Ponzan, Poland, a company spokesperson confirms. Further, the company has proposed ending preclinical development at its Mississauga, Canada, site, and end neurosciences drug activity in Harlow, U.K.

In addition, GSK is abandoning research in select neuroscience areas, including depression and pain. At the same time, it has created a new unit devoted to finding drugs to treat rare diseases.

The British drug firm also plans to find more drugs outside its own labs; GSK already farms out 30% of its discovery research activities, or more than 80 projects, to some 47 partners. The goal is to bring in new drug candidates through option-based pacts, which usually involve buying the right to license an early-stage drug candidate later on in its development

For its part, AstraZeneca is slashing another 8,000 jobs on top of the 15,000 positions previously targeted for elimination between 2007 and 2009 (C&EN, Feb. 1, page 19). The company says some R&D sites could be closed. AstraZeneca has also dropped 20 compounds from development, including Zactima, in Phase III lung cancer trials, and four drugs in Phase II trials.

AstraZeneca has formed a "portfolio investment board" that will make decisions about funding individual R&D projects "These changes reflect an acknowledgment that insufficient drugs have moved into Phase III and onto the market," Credit Suisse analyst Luisa Hector said in a note to investors.

Pfizer, meanwhile, says it will spend far less on research in coming years. Its 2009 R&D budget was nearly flat at $10.6 billion compared with 2008, and the firm will spend $9.1 billion to $9.6 billion this year. By 2012, R&D spending will be $8.0 billion to $8.5 billion, Bernstein Research forecasts.

Pfizer has also weeded out 100 of its 600 drug candidate programs, in the process shifting the balance toward biologic drugs.

Chemical & Engineering News
ISSN 0009-2347
Copyright © 2011 American Chemical Society
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