Drug Development

Two years into an R&D overhaul, GSK plans $250M lab project near Philly for another migration of US staffers

Andrew Witty, GSK

Andrew Witty, GSK

GlaxoSmithKline set out to completely overhaul its US R&D organization in late 2014, axing hundreds of staffers in its longtime drug investigation center in Research Triangle Park to counter the sluggish progress of its pipeline. The move by CEO Andrew Witty set in motion a series of restructuring waves that have had a profound impact on its research groups, now centered in Philadelphia and Stevenage in the UK.

And another wave is forming now.

GSK is spending $250 million to make over its lab facilities in Upper Providence Township northwest of Philly. By 2018 the site will host 3,200 R&D staffers, twice what it is right now, as first reported by The Philadelphia Inquirer recently. Some of those staffers are coming from nearby Upper Merion and RTP, and a GSK spokesman tells me that the pharma giant is also hiring.

Back in late 2014, when the company outlined plans to lay off 900 staffers in its WARN letter to the state, GSK had a sizable 2,500 R&D workforce in RTP. Today, a spokesperson tells me that’s dwindled down to about 400 as the company followed through on its cost-reduction plan.

Hundreds of the workers were transferred to GSK’s CRO, Parexel, which promptly turned around and laid many of the same workers off in its own downsizing effort — outsourcing the layoffs, so to speak.

“Today there is a very much reduced scale of R&D activity in RTP,” says the spokesperson for GSK. “What remains in RTP is some infectious disease research (including ViiV folks), late-stage research groups, regulatory and medical functions.” A “handful” of those people may still be in transition, she adds.

GSK, though, is still investing heavily in R&D, as its $250 million lab project underscores. The company spends about $4.4 billion per year on R&D.

Makeovers like this have become the rule rather than the exception in Big Pharma. Novartis’ latest rejigger happened weeks ago, as Merck was overhauling its ops with an eye to creating a new hub in the Bay Area. AstraZeneca is building a South San Francisco research hub as well. Pfizer long ago relocated much of its research staff into Boston/Cambridge, warning at the time that there would always be a focus on refining and changing in the face of new R&D priorities. Shire has been relocating staffers into its Boston-area HQ. And so on.

In Big Pharma, ongoing R&D reorganizations are quite common. Few things stay settled for long.


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