Rebuilding at Glaxo
GlaxoSmithKline Venture Strategy
The head of a company that has not created blockbuster drugs for a long time turns laboratories into biotech startups
Robert Langret, Forbes.ruFor the British pharmaceutical giant GlaxoSmithKline, the past year was not easy.
The shares are not growing (and in comparison with 2005 they have fallen by 20% at all), sales too, and in the news feed there is only a series of legal defeats and unsuccessful PR moves. In February 2010, a US Senate commission accused GSK of misrepresenting data on the Avandia diabetes drug (it causes heart problems); 7 months later, the drug was banned in the US and withdrawn from the market in Europe. In November, the U.S. Food and Drug Administration (FDA) rejected an application for approval of a prostate cancer prevention drug. The company's laboratories have not released hits for a long time.
"The industry is under enormous pressure," says GSK chief executive Andrew Witty. "There's no point in dreaming of other worlds. We need to change."
Whitty decided to focus on diseases that had been ignored by the industry for a long time and rebuild his research work. Avoiding major acquisitions, he shifted resources to emerging markets and predictable sectors like vaccination and consumer goods. Today, drug sales in major Western countries account for 23% of GSK's $44 billion in annual revenue (for comparison, in 2007 it was 40%). And already 24% of sales are accounted for by emerging markets.
Whitty hopes that this will stabilize the company for the time that he is engaged in restructuring research work. But the real growth will appear only when GSK laboratories create new drugs.
To step up drug development, Whitty abandoned the development of analog drugs and created 40 tiny autonomous research units. They focus on risky areas of science – a few years ago, only startups with nothing to lose worked in them.
Most of the new drugs that are in the last stages of testing (there are now 18 of them) belong to completely new classes of medicines. One remedy is aimed at slowing the development of type 1 diabetes in children and adults who have just been diagnosed. Another is a vaccine to prevent recurrence of lung cancer; it can give rise to a whole wave of new drugs that strengthen the immune system against cancer. And another remedy may become the first in a new class of drugs that prevent a heart attack by stabilizing platelets in the arteries. With a successful scenario, sales of the drug can reach $ 10 billion.
Perhaps GSK will achieve its first major success now if a new drug against lupus – Benlysta – is approved by regulators. It will be the first new drug for an autoimmune disease to appear in the last 50 years. "Glaxo will have the best, most encouraging and sensational developments in the industry over the next three years," says Gbola Amusa, an analyst at UBS.
"If at least one of the new drugs enters the market, the company will have a huge chance to go up," says Witty. And investors ask him, "Andrew, do you spend $6 billion a year on R&D. Do you understand where the money is going, or is it just a black hole?"
Despite 25 years at GSK, Whitty is still a bit of an outsider here. He went to work for the company right after university, where he received an economics degree. He was engaged in marketing in South Africa, Singapore and the USA – and only then headed production in Europe. "I've spent most of my career away from the center," Whitty says. In 2007, he beat two other internal candidates in the fight for the leadership position. (Chris Wichbacher, who lost to him, now heads GSK's French competitor, Sanofi-Aventis.)
Changing the research culture is not an easy task, and Whitty is well aware that there are no quick solutions here. SmithKline Beecham and Glaxo Wellcome, which merged into GSK in 2000, were among the first to invest in genetic technologies that were to quickly lead to the emergence of many new medicines. Genetics has discovered hundreds of new targets, but the drugs have only begun to appear now.
The problem was that the scientists from GSK clung to their projects until the last. Self-developed drugs successfully passed clinical trials twice less often than drugs purchased from other companies. "Everyone fell in love with their projects and pulled them even when they were breathing hard," says Moncef Slowi, chairman of the research and development division. The researchers sent the drug to the next stage of testing if it worked at least in a limited way on the previous one, instead of reviewing all the data and deciding whether it makes sense to continue the project. According to Slowey, "we don't get emotionally attached to external projects and objectively consider all the difficulties." Slowey created an internal oversight commission of 20 people to study all drugs with the same meticulousness before the start of large trials. As a result, work was stopped on several medications, including a diabetes medication that worked fine, but did not show obvious advantages over similar competitors.
The main step of Whitty in 2008 was the division of the Department of early research into 40 research teams, each of which employs from 7 to 70 scientists. The head of each such group receives powers as the director of a small biotech company: a budget for 3 years with the right to dispose of it at his discretion. "Whitty was very insistent on this," says GSK senior vice president Patrick Vallance. The idea that the invention of a new drug is a technological process, Whitty considers absurd. "It all depends on the creative people and the atmosphere in the laboratory." Gather good researchers in one place – and "they will intuitively lead you to success."
Like small biotech companies, teams are under pressure from the investor. In three years, GSK will study the results and dismiss those who have done nothing. "We're going to give people the opportunity to make amazing discoveries, but we're not going to fund inconclusive research," explains Whitty. "I've been here for 20 years. We've written a lot of plans," says GSK microbiologist David Payne, who leads the team developing new antibiotics. – For the first time, someone is waiting for results for their money. It is very clear who is responsible for both success and failure."
The new structure gives Payne the freedom to test new ideas. One of the drugs that are at an early stage of human testing is made on the basis of boron, not carbon. This allows you to influence the target, which could not be reached with the help of standard hydrocarbon chemistry. In the Glaxo laboratory, the drug was tested against 2,000 strains of bacteria from around the world and did not find any that turned out to be resistant. Another direction is working to preserve the effectiveness of existing drugs by blocking the ability of bacteria to push antibiotics out of the cell, which is one of the mechanisms of microbial resistance.
When GSK did not have its own experts to develop treatments for autoimmune diseases, a biotech company, Tempero Pharmaceuticals, was created. GSK provided the initial financing and owns a controlling stake, but the startup located near Harvard operates independently. "This could be a new model for pharmaceutical discoveries," says Spyros Hamas, an experienced biotechnologist hired to run Tempero. According to him, being a few miles away from the university founders of Tempero is a great advantage.
Not all GSK deals are indisputable. In 2008, the company spent $720 million to purchase Sirtris, which was working on drugs against age-related diseases based on the substance resveratrol. Since then, rival researchers from Pfizer have questioned the ability of Sirtris drugs to work as GSK claims. Trials of one of them were suspended when a link was found with kidney damage in cancer patients. Other Sirtris tools are still being tested. Whitty says she has no regrets.
Harvard Business School professor Gary Pisano doubts that the reorganization will significantly change anything. The main problem that pharmaceutical companies suffer from is not bureaucracy, but "a lack of a deep understanding of the biology of the disease." Organizational innovations will not solve it," he says. His research demonstrates that small firms are no more effective than pharmaceutical giants. "Unless the company can develop world-class science, these divisions will show the same sad results as ordinary firms."
But does GSK have a choice? Darapladib, a drug that stabilizes platelets in the arteries, is a typical risk that pharmaceutical companies should take today. Together with the lupus medication, these are the first results of GSK's genetic research. To prove that this drug prevents heart attacks, Glaxo is conducting two trials involving 27,000 people. Trials should be large because there are many good heart medications and it is difficult to prove an additional benefit. The first results will appear in 2 years.
Ultimately, Slowey insists, Glaxo's strategy is not as risky as it seems. "Working on analogues of existing drugs is the biggest risk. You spend all the money, and in the end you get nothing," he says.
The most difficult task is to restore public confidence in GSK. Whitty's entry into office was overshadowed by the failure with Avandia. In May 2007, a year before Whitty took office, Cleveland Clinic cardiologist Stephen Nissen published an analysis that showed that Avandia increased the risk of heart attacks by 43%. The company's own data, as it turned out, was consistent with the results of Nissen. The company hid this information and continued testing the drug.
During the Senate investigation, it was confirmed that GSK tried to "minimize and distort data that Avandia can increase cardiovascular risk and "intimidate independent doctors" concerned about the side effects of Avandia. In July, a reviewer from the Food and Drug Administration concluded that a large trial that seemed to rehabilitate the drug's reputation was conducted with serious violations, which helped the decision to ban its sales. The company firmly rejects the Senate's conclusions, but it had to set aside $2.4 billion to settle lawsuits against Avandia and other drugs. Whitty, whose name is not mentioned in the 342-page Senate report, insists that all data on Avandia was open. He says that the dispute, which lasted three years, shows the ambiguous nature of the risk assessment of medicines. "This story is over. Now we're moving on."
Portal "Eternal youth" http://vechnayamolodost.ru04.02.2011