Dive Brief:
- GlaxoSmithKline revealed Wednesday that it will restructure its pharmaceutical R&D division under the guidance of new Chief Scientific Officer Hal Barron, announcing the move along with second quarter earnings.
- The new approach is expected to deliver annual cost savings of £400 million, or about $465 million, by 2020 "primarily through supply chain optimisation and reductions in administrative costs." The new program to fund R&D is expected to cost £1.7 billion over the period to 2021. The company reduced its R&D spend during the April through June period to just over $1 billion, partly reflecting cuts to its drug development pipeline made last year.
- Highlighting the shifts underway, GSK also announced a collaboration with commercial genetics company 23andMe that will take place over four years. The British pharma will make a $300 million equity investment in the genetic testing company and costs will be shared jointly between the companies.
Dive Insight:
GlaxoSmithKline admits it has fallen behind competitors in R&D. Barron, who joined the company in January, noted on a call with media that while GSK has received a significant number of drug approvals over the last several years — in-line with the industry average, in fact — those drugs have not been particularly valuable.
Underscoring that fact, sales from the pharmaceutical division were only up 1% year-over-year this quarter, mostly driven by the company's HIV business.
Barron is hoping to change all that. The new R&D chief aims to usher in an era of genetics and immune-based research at GSK. His approach will focus on "basic biology of the immune system" to guide selection of the drugs and diseases the company will target going forward.
The collaboration with 23andMe will be a driving force behind that. The genetic testing service already has more than five million users, making it one of the largest sources of genetic and phenotypic data in the world — more than 80% of users have already agreed to be contacted again for genetic research.
GSK plans to use the database, as well as machine learning, to pinpoint genetic variants that could become targets for drugs. It will also use the de-identifed data to determine which subgroups of patients could better respond to treatment — learnings that could help with clinical trial recruitment.
23andMe entered clinical research just over three years ago, setting up its own labs for drug discovery. The company told media on a call that it currently has a number of prospective preclinical compounds in development for disease like osteoarthritis, liver disease and autoimmune conditions. 23andMe said it disclosed to GSK the targets it is researching after the deal between the two companies was signed.
Barron noted on the call that the collaboration could eventually allow GSK to use the zip code data that 23andMe has to better determine where clinical trial sites should be and to know where the patients are.
The first joint project for the two teams will be on a small molecule LRRK2 inhibitor that GSK has contributed, which is currently in preclinical development for Parkinson's disease. The LRRK2 gene is only present in a small number of Parkinson's patients — approximately one in every 100. 23andMe has already identified "hundreds" of individuals diagnosed with Parkinson's disease who have the genetic variant and are willing to be re-contacted.
23andMe CSO Richard Scheller, who previously worked with Barron at Genentech, said on the call that the company has also identified more than 3,000 re-contactable people who are carriers of the variant but have no Parkinson's symptoms, potentially helping further study of the variant.
