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GSK's new CEO unveils strategic shakeup strategy (+ video)

Jul, 26 2017, 7:43 AM

Drug giant GlaxoSmithKline's new CEO Emma Walmsley utilized the timing of GSK's latest earnings report to unveil the new strategic direction in which she intends to take the company. A key point of emphasis is HIV, which could mean good news for the Triangle.

"Our priority for the second half of the year is to maintain this momentum and prepare for the successful execution of several important near-term launches in Respiratory, Vaccines and HIV," Walmsley, who took over as CEO in April and has already made a number of changes in management, explained.

GSK's joint ViiV Healthcare, which is focused on AIDS drugs, is based in the Triangle and conducts considerable research through that operation.

The drug firm, which operates a major campus in RTP and a manufacturing plant in Zebulon, also formed a partnership with UNC-Chapel Hill for AIDS research under previous CEO Andrew Witty.

Walmsley said GSK has made "investments" to "accelerate the review of our new two drug regimen in HIV."

VIDEO: GSK CFO Simon Dingemans offers update as part of earnings announcement at https://www.youtube.com/watch?v=-Z2HmCuR4HY

Management changes also continue.

Walmsley already has hired Karenann Terrell, who served as chief information officer at Walmart for more than six years, as GSK's chief digital and technology officer. The CEO's strategy going forward to rely more on digital technology for drug development.

She also recently hired former AstraZeneca executive Luke Miels to join the management team. He starts in early September after GSK negotiated an agreement with its rival for the services of Miels who will lead pharmacy operations.

On Thursday, Walmsley shifted to spelling out GSK's corporate strategy. She also wants to save more money.

Some 30 early-stage drug development programs are being halted.

GSK has launched what it calls a "strategic review of its Rare Diseases unit." That could mean a sale.

And GSK will now focus some 80 percent of its R&D capital on oncology and immuno-inflammation.

Key points noted by GSK are:

GSK also recently said it would sell non-core assets such as a drinks line and decided not to build a new production plant in the U.K.

The Walmsley strategy

​In an explanation accompanying the earnings results (revenues were up 3 percent in constant currency; higher overall due to a weaker pound), GSK spelled out plans through 2020:

"Going forward, GSK intends to focus on three long-term priorities: Innovation, Performance and Trust.

"Innovation is important for all three businesses but the Group’s top priority is to improve in Pharmaceuticals. A key near-term focus is to maximise value from new products and three other material new launch opportunities: Shingrix, a potential new vaccine for shingles; Closed Triple, a new 3-in-1 respiratory medicine; and new two drug regimens in HIV.

"In its Pharmaceuticals pipeline, GSK has developed a priority list of assets to invest behind.

"This priority list will evolve as data reads out.

"The Group has also set a target to deploy over time 80% of its Pharmaceuticals R&D capital to priority assets in two current therapy areas: Respiratory and HIV/infectious diseases; and two potential areas: Oncology and Immuno-inflammation.

"Significant data is expected from these priority assets over the next three years which will be used to inform R&D investment decisions and how best to generate value from these assets.

"GSK also expects to pursue disciplined business development to augment its early-stage pipeline in these priority areas.

"As part of its efforts to prioritize and allocate resources in R&D, GSK is terminating development program that are unlikely to generate sufficient returns. GSK has so far made decisions to terminate, partner or divest more than 30 pre-clinical and clinical programs.

"The Group has also undertaken a strategic review of its Rare Diseases unit and is now considering options for future ownership of these assets.

"In addition, the Group is taking steps to improve the partnership between R&D and its commercial organization as well as its governance around pipeline decision-making with the establishment of a new Development Advisory Board and a new Board Scientific Committee."

Read more at:

http://www.gsk.com/media/3866/press-release-gsk-delivers-further-progress-in-q2-and-sets-out-new-priorities-for-the-group-26-july-2017.pdf





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