GlaxoSmithKline is to stop researching antidepressant medicines as part of a shake up in research and development designed to strengthen productivity.
Andrew Witty, chief executive, said the pharmaceutical company would cease discovery work in depression, a pivotal part of its historical neuroscience activity, in an effort to save £500m a year in costs by 2012.
Andrew Witty: introducing productivity into R&D
The move came as he unveiled an 18 per cent rise in full-year pre-tax profits to £7.9bn on sales up 16 per cent to £28.4bn in the 12 months to December 31.
It marks a symbolic shift for GSK, which as recently as 2006 generated more than £2bn from sales of its antidepressants Wellbutrin and Seroxat or Paxil, a drug that has sparked criticism from regulators and a series of litigations against the company.
Other large pharmaceutical groups including AstraZeneca and Pfizer have also unveiled significant cost- cutting and a shift towards more licensing of drugs at the expense of in-house drug development.
GSK on Thursday became the first pharmaceutical company to disclose a measure of productivity in R&D, saying the estimated return on investment from its late-stage pipeline had risen in recent years from an industry average of 7 per cent to 11 per cent, with a future “aspiration” of 14 per cent.
Mr Witty said 2009 was “the year when our strategy really started to demonstrate its value”, with a more globalised and diversified business.
He rejected suggestions that the closure of depression R&D as well as pain research had anything to do with past litigation problems, saying that antidepressants were “among the most expensive, high-risk” drugs with weak “endpoints” that made it difficult to measure likely success until late in the development process.
Half of GSK’s latest £500m in annual savings will come from R&D, much from the closure of the two neuroscience areas as well as broader efforts to reduce the fixed costs that account for a third of R&D spending.
That should particularly affect GSK’s depression research centres in Harlow in the UK as well as Verona in Italy, although Mr Witty said the impact on jobs in the UK would be in “the hundreds”.
He stressed that other neuroscience research, such as into neurodegenerative and neuro-inflammatory diseases, would continue.
GSK also unveiled a new structure reflecting its recent interest, like other large companies such as Pfizer, in treatments for extremely rare but high- priced “orphan” diseases, such as Duchenne Muscular Dystrophy, Hunter syndrome and Fabry and Gaucher disease.
Professor David Nutt from Imperial College in London, a leading expert on antidepressants, called GSK’s decision to withdraw from the field “bad news”.
