GSK scales back workforce in neuroscience research

The transformation of GlaxoSmithKline from a company relying on a handful of expensive treatments to one dependent on consumer healthcare and emerging markets took a further step yesterday as it announced plans to scrap part of its neuroscience programme, with the loss of hundreds of jobs in the UK.

The chief executive, Andrew Witty, said the job losses were part of the drug-maker's "campaign to modernise" its research and development division. He added that focusing on returns for investors was not consistent with spending millions of pounds on treatments for conditions such as depression and anxiety, for which regulatory approval was notoriously difficult to obtain.

Mr Witty refused to give details of the numbers of jobs that would be lost throughout the company, but denied reports over the past week that GSK was preparing to lay off up to 4,000 staff in Britain. "Unlike other drugs companies, we are now facing fewer headwinds," he added. "We are happy that the strategy to change the focus of the company is on track. We are confident about the future."

Mr Witty's comments came as GSK announced its full-year results for 2009. It recorded a pre-tax profit, after restructuring costs, of £7.9bn, which was marginally ahead of its performance in 2008.

There had been speculation that GSK would follow rival AstraZeneca's announcement last week that it planned to shed 8,000 jobs by 2015.

Referring to the two firms being at different stages in the drug development cycle, and AstraZeneca facing comparatively greater generic competition, Mr Witty said: "We are a very different company in many ways."

GlaxoSmithKline has lost $4.5bn to generic competition over the past three years.

The research and development cuts form part of a plan to save £500m by 2012. Infrastructure savings and job losses in research and development will save £250m, with the rest coming from commercial activities, including sales and marketing.

Pandora's box: Witty praises patents policy

*The Government can do nothing to stop big pharmaceuticals companies cutting large numbers of jobs, but policies to attract the best scientific talent to Britain are working, Lord Drayson claimed last night.

The Science Minister said the global pharmaceuticals industry was coming under pressure in several areas but a number of companies had committed to investing in the UK. His comments came after Andrew Witty, the chief executive of GlaxoSmithKline, praised the Government for introducing the "patent box" in its pre-Budget report. The measure, taking effect in 2013, will cut to 10 per cent the corporation tax due on income derived from intellectual property registered in the UK.

Mr Witty said the policy was the biggest single reason why GSK would continue to invest heavily in Britain. Last week, he praised the Tories' economic policies but yesterday he denied that this amounted to a pre-election endorsement of David Cameron's party.

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