Tachi Yamada, Head OF R&D at Glaxosmithkline: Outsider who ensures the 'monster' is fed

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The Independent Online

When the news that Vioxx was being withdrawn flashed across the world on 30 September, it was immediately clear that there would be convulsions across the pharmaceutical industry, not just at Merck, the US group behind the arthritis painkiller.

Tachi Yamada, the head of research and development at GlaxoSmithKline, the UK's biggest drug maker and the world's No 2, had been ready to talk up the sales potential of GSK's own, similar drug - a possible jewel in the pipeline of new drugs for which he is responsible. Instead, he was forced into fevered negotiations with a US regulator that, it seems, is split over the safety implications for the class of painkillers known as Cox-2 inhibitors.

The pipeline update he is scheduled to present on Tuesday will include trial results for GSK's Cox-2, codenamed 406381, whose launch is certainly delayed now beyond 2007 because of the need for longer trials. But he remains optimistic that the breadth of the pipeline will impress and that there are blockbuster drugs aplenty to return the company to growth.

"Yes, we're big, yes, we've got a job to grow," he says. "My job is to ensure that the pipeline can feed this monster. I believe we can support the growth of this company, and at a very good clip."

The backdrop to next week's presentations may not be as favourable as he had once hoped, but attitudes to GSK's research and development operations have shifted substantially since a similar outing this time last year. The company, formed from the merger of SmithKline Beecham and Glaxo Wellcome in 2000, had put off and put off having the traditional "R&D Day" to discuss its pipeline of new drugs - because it didn't really have one.

"When I became head of R&D at SmithKline Beecham in 1999, I was somewhat surprised at how impoverished our pipeline was. Then when we merged with Glaxo Wellcome, I found that the pipeline wasn't rich and full there either."

There's no doubt about the quantity now. This year, GSK will push 20 new chemical compounds into the crucial second phase of human trials, when their effectiveness is proved one way or the other. The issue for investors on Tuesday will be the quality. Are the trial results good enough to be certain these drugs will make it to market? What might be their ultimate sales potential? And, increasingly, what might their side effects be? It is because Japan-born and US-educated Mr Yamada is centre stage at this point in GSK's history that he has been asked to stay on beyond the normal retirement age of 60, which he reaches next year.

Tachi - a shortened version of Tadataka - Yamada was born two months before the end of the Second World War and, aged 15, sent to boarding school in the US. "My father was a real internationalist and believed that one of the reasons the war happened was because of a Japanese education system that fostered obedience, rote learning, a sort of Samurai ethic. One day he just said, 'In two weeks you'll be going to America, I'm going to send you to the best school in America and of course you're going to be the best student there'. And that was kind of the way I came to America."

He arrived at SmithKline Beecham late after a long career in academia, in gastroenterology and via the unusual route of having first been a non-executive director while chairman of the Department of Internal Medicine at the University of Michigan until 1996. After heading a commercial division, he became chairman of R&D in 1999.

The outsider's "fresh pair of eyes" has been used to oversee a revolution in the way GSK does its research and development work. His legacy will be the "centres of excellence in clinical development", or Cedds, which concentrate on specific disease areas and compete for central funds. The aim is to recreate the entrepreneurial spirit of smaller biotechs for the crucial work of taking a drug through animal testing and the early stages of human trials.

Size, he says, is an advantage in early-stage research, when expensive computers are required to screen vast numbers of potential drugs, and in the last stages of human trials, when hundreds or thousands of volunteers are needed. "But in the middle, from having a lead compound to having proof of concept in the clinic, size is an absolute impediment. That's when you need quick, entrepreneurial, independent, free-thinking, unencumbered people."

Now he is going further, pioneering experiments in what he calls "virtualisation". He has signed wide-ranging partnership deals with smaller drug development companies, six so far, who become "virtual Cedds" and introduce "competition between the internal and the external". Mr Yamada says they could eventually account for more than half of GSK's new drugs and offer a new business model for the pharmaceutical industry as a whole. "It may well be that in the future there are gonna be fewer companies. And there are gonna be some large companies around which there are constellations of smaller companies, kind of like we have."

We meet in GSK's plush office in a converted townhouse in Berkeley Square, west London ("very convenient, a little opulent maybe"), a world away from the storms surrounding the industry in the US. A clock chimes the quarter-hours in the dining room where executives thrash out what are in effect business deals with UK ministers.

A new animal testing facility has just been built in Singapore, mainly because its government offered financial incentives, partly because of the animal rights threat that Tony Blair this week promised new legislation to fight. But GSK is planning more cancer trials via the NHS from now, thanks to the release of £200m of Treasury funds to help.

Mr Yamada says he has had many productive meetings around this dining table. "I feel like the UK is an environment that allows us to function as a real partner. In the US it's a lot more difficult. In fact, everywhere else in the world. There's not the same sense of ownership. The UK feels like they own GSK, and it's a wonderful feeling when society feels you are an important asset. Now of course they don't like our prices and all this other stuff, business realities we are going to have to come to grips with sooner or later, but I can't imagine for us a better environment."

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