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GlaxoSmithKline Slashes Research Staff

by: Derek Lowe June 11, 2008 | about stocks: GSK    
Derek Lowe

Derek Lowe

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Update: GSK is indeed wielding the ax Tuesday and Wednesday. I'm hearing that the smallest cuts are around 40% of the entire research staff at the various sites. This is big, and it's bad...

GlaxoSmithKline (GSK) has been going through some sort of mid-life crisis recently. Their chairman, Jean-Pierre Garnier, just retired amidst the mutter of angry shareholders, for one thing. And the company has been splashing out on some very flashy acquisitions, such as the Sirtris deal which has just now completed. This is all going on against the backdrop of the Avandia disaster, and a perceived drought of current clinical successes.

Now the company is cutting their own head count in research, to what sounds like a pretty serious degree. There have been substantial cuts at their sites in Italy and the UK, and the Research Triangle and Pennsylvania sites are getting it even harder, from what I'm hearing. Some chemistry areas are losing more than half their people. I believe that Tuesday was the day that a lot of people heard whether they stay or go, and I feel bad just hearing it from a distance, having seen that stuff close up a few times myself.

The proximate cause of all this turmoil is probably the loss of all that Avandia revenue, although that may have just advanced the timetable on some decisions that the company was going to make eventually no matter what. Many GSK scientists are (understandably) feeling as if they’re being ditched in favor of a bunch of people whose main advantage is that upper management isn’t so familiar with them yet.

Whether that’s true or not, it’s a tough one to refute. There is a persistent “grass is greener” mentality in the drug industry. Perhaps that’s partly because, on an individual basis, the grass really is often greener. The best way to work your way up in the industry, for the majority of scientists, is to jump ship once in a while, which keeps you from being pigeonholed or taken for granted in your current company (a less charitable view, accurate in a few cases, is that it’s in some people’s best interest to leave before everyone else catches on to them).

And on a company-wide level, it’s hard not to think of everyone else as being at least a little more competent than your own shop is. That’s because you see the inevitable bozo mistakes of your own workplace up close, whereas you don’t get such good seats for the ones happening elsewhere. And the side that all drug companies show to their competition is a bristling pile of patents and confident press releases about their mighty drug pipelines. You know, looking at your own company’s public face, how much of it is real and how much is bravado or wishful thinking. But it’s hard to keep in mind that the same goes for everyone else, too.

I don’t know how much this effect is contributing to what’s going on at GSK. After all, some of the deals that the company’s making are for specific development compounds that they didn’t have in-house. But I’m pretty sure that there are researchers over there who are thinking about whether they could have gotten a sirtuin program off the ground a few years ago, like the one they just bought. Or what would have happened to them if they'd tried...

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This article has 6 comments:

  •  
    Jun 11 08:30 AM
    The job market in pharmaceutical R&D is pretty much doomed.
    Reply
  •  
    Jun 11 11:18 AM
    Cardiovascular Chemistry at Upper Merion axing 2/3 staff (51 out of 76) in bloodbath Tuesday/Wednesday. Similar size cuts in CVU Chem at RTP. Biology/Pharmacology hit even harder. New strategy in research--lottsa luck!!
    Reply
  •  
    Jun 11 07:34 PM
    Cardiovascular Biology at Upper Merion was even worse. 72% of this group has been cut. As one of the unfortunate bunch - it is very scary wondering if the rest of the industry is headed in the same direction.
    Reply
  •  
    Jun 11 11:36 PM
    The FDA has pretty much made it impossible for anything new to get approved. Or so expensive it is not worth it. When there was explosive growth in physiology as in the 70's-80's, we got away with it. Now the only new stuff is immunomodulators which target specific receptors. They are very expensive and limited in their use.We are going to be like Canada, which uses all old medicine.
    Reply
  •  
    Jun 11 11:38 PM
    PS Derek, do you take time from pitching in the majors to write this stuff?
    Reply
  •  
    Jun 12 12:16 PM
    The slashes have occured in the midst of a reorganization that is being sold internally as "small is beautiful" and the corporate sheep/pundits are eating it up by the truckload.

    The RTP site had 50% cuts across the Metabolic CEDD in chemistry, biology, and DMPK. The Metabolic CEDD leadership has a track record of not contributing to the GSK pipeline. However, the cuts mostly did not come from the leadership and the same people are still in charge.

    The culture that is forming at GSK RTP is terrible for career growth and development and is highly political. An HR colleague at GSK said that specifically the MCEDD chemistry group at RTP is known to be headed by a shark (underhanded businessman) and that the HR problems that arise from chemistry group are derived from amateur management. The chemistry group is considered the "GSK Highschool" by HR.
    Reply
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