Glaxo to cut 350 R&D jobs in drug research revamp

11 June 2008

Mumbai: GlaxoSmithKline Plc, Europe's biggest drugmaker, will cut around 350 jobs in drug research and development as part of an ongoing restructuring programme, the company said.

The reductions, representing around two per cent of the group's worldwide R&D workforce of 17,000, add to the growing tally of job losses caused by increased generic competition to research-based pharmaceutical companies.

At the same time, GSK is shifting research and development activities to lower-cost countries, including China, and partnering with smaller biotech companies to come up with new drugs.

As part of the programme, GSK will eliminate half of about 500 jobs at its two research and development centers in Philadelphia and RTP -  the two centres  involved in finding treatments for cardiovascular and metabolic diseases, including diabetes. GSK now employs 4,700 in RTP.

GSK's restructuring has been fueled by rising competition from generic drugs, and about $2.5 billion in lost sales of Avandia - a best-selling diabetes pill until a study published in May 2007 linked it to an increased risk of heart attack. The drug maker is also facing patent expirations of drugs that are likely to generate $4.6 billion in annual sales this year.

The staff cuts are part of a longer-term strategy to ensure effective competition in a rapidly changing and challenging environment.