GSK dropping 22% of its pharma portfolio

GSK trimming manufacturing network in pharma product and R&D shake-up

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GSK will simplify its in-house manufacturing and cut CMO use by 25% under plans to strengthen its pharmaceutical business.

GlaxoSmithKline is looking to reorganise its entire operations over the next three years and said yesterday its top priority is to improve its pharmaceutical business.

“The biggest change in our company is going to be felt across our pharma business,” CEO Emma Walmsley told stakeholders in a conference call.

Despite the pharmaceutical business performing well in the second quarter, pulling in sales of £4.4bn ($5.8bn) – up 12% year-on-year – she said reductions in the space were necessary to ensure long-term competitive performance.

“Simplifying our portfolio is a key enabler of improving our network efficiency. In the next 12 months, we expect to divest more than 130 non-core tail brands within pharma alone brands that could create complexity for our supply chain. Overall, we're looking for 22% reduction in the number of pharma brands we have.”

Walmsley, who took over the top job at GSK from Andrew Witty in April, added the firm also plans to terminate, partner, or divest 13 clinical candidates and around 20 preclinical programmes as part of its simplification strategy.

“We're also looking to reduce our overheads in manufacturing across the whole group with a simpler network that improves productivity, and we will reduce our supply base in manufacturing by 25% by 2020.”

She added: “We've already announced plans to reduce offsite network across the group by nine sites and we're continuing to review and look for further opportunities to simplify the network in coming years where it makes sense.”

Last week GSK announced it was looking to sell its cephalosporin antibiotics business along with facilities in Verona (Italy), Ulverston and parts of its County Durham site (both in UK). The UK-headquartered firm also said it was shelving plans to build a biomanufacturing plant at the Ulverston plant.

According to its 2016 report, GSK has 87 manufacturing sites across its pharmaceuticals, vaccines and consumer healthcare businesses employing over 38,600 people worldwide.

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