Big Pharma Tries to Shake Things Up

This post was commissioned on June 10, 2008, and it was categorized as Company Shakeups.

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Image by Getty Images via Daylife

GSK to shake-up research strategies (Financial Times)
UCSF, Pfizer sign collaborative research deal (San Fransisco Chronicle )

Both Via Pharmalot

It’s no secret that big pharma players have some work to do on their late-state pipeline and that they are collectively grasping at straws trying to bring in revenue.

Clearly, deciding to reorganize your entire R&D structure isn’t a small undertaking. Head of drug discover at GSK, Patrick Vallance, told a conference in London yesterday (from FT.com article):

GSK would increasingly try to become “more biotech-like” in its efforts to stimulate innovation.

He said drug discovery would be split into “smaller units with a very clear focus on single [disease] areas . . . and reward people based on successful value creation”, with “disincentives” against destroying value.

Wait, reward people based on value creation and discourage people against destroying value? What a crap line. Just say you are shaking things up. I commend GSK for at least making drastic changes to combat a vicious problem.

Pfizer, on the other hand, isn’t being so dramatic. Paying UCSF to do some research is hardly a novel idea; a baby step compared to GSK.

I think the problem isn’t with big pharma though, I think it’s with our expectation. These companies bring in tens of billions of dollars revenue. To sustain a 10% annual growth rate is like adding a blockbuster drug ever year at a minimum (not counting patent expirations). I hope I’m not the only one that thinks this standard might be a bit unreasonable.

Theoretically Related Posts

September 10, 2008 -- GSK and Cellzome Announce Alliance over Kinase Technology (0)
February 6, 2009 -- Idenix Take $34M Upfront From GSK For IDX899 (0)
February 5, 2009 -- GSK Not Joining Pharma-mergerfest-a-palooza ‘09 (0)
October 30, 2008 -- GlaxoSmithKline to acquires Genelabs Technologies for $57M (0)
October 23, 2008 -- GlaxoSmithKline and AFFiRiS Ink Alzheimer’s Disease Vaccine Deal (0)
July 31, 2008 -- BMS Offers to Buy The Rest of ImClone (0)
April 30, 2008 -- Financing for Concert Pharmaceuticals (0)
April 22, 2008 -- GlaxoSmithKline Buys Sirtris for $720M (3)
April 17, 2008 -- Treximet… Finally! (1)
January 26, 2009 -- Pfizer-Wyeth (0)

This post was constructed by

Eben Tessari

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Eben is a highly caffeinated business development associate at a small, cash sensitive pharmaceutical company somewhere in Massachusetts. He enjoys cliche-less banter, compartmentalization, non-equilibrium thermodynamics and NPV analysis. Agree or disagree with what he's posted? He encourages comments.

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