GSK productivity picking up
pharmafile | October 24, 2003 | News story | |Â Â Â
GlaxoSmithKline's early-stage pipeline of new drugs has shown big improvements recently, according to analysts Deutsche Bank.
"These metrics could be taken as the first evidence that GSK novel research concept is delivering an uplift in productivity", the analysts said.
Deutsche Bank's report says the company had doubled the number of new drugs going into clinical trials and quadrupled the number of those moving on to phase II trials.
"While we still need to be convinced that GSK's earlytage pipeline will yet mature into a collection of promising late-stage compounds, we would certainly agree with the contention that expectations for GSK's pipeline are very low indeed,said the report".
GSK's data shows it has 14 new chemical entities in its cardiovascular, urogenital & metabolic area, of which two have already been submitted for approval. The company also has 11 NCEs in both its neurology & gastrointestinal, and oncology, musculoskeletal & inflammation franchises, mainly in the pre-clinical phase.
The news will fuel hopes that the company may soon be in a position to hold its long-awaited R&D review this year. Senior executives at the company are due to host the update towards the end of this year, after its cancellation last November because of a lack of good news.
Two years ago the company restructured its R&D structures into seven 'Centres of Excellence for Drug Discovery', which were intended to mimic the focus on discovery found in smaller biotechnology firms.
The company's restructuring has been under intense scrutiny since its was unveiled in 2001, with the loss of four of the most senior R&D executives, including James Palmer, Senior VP, New Product Development, Research & Development, causing concern among observers.
The three other departing scientists each headed up one of GSK's six specialist drug discovery units and were responsible for selecting new compounds to turn into safe and effective drugs.
GSK's own figures show 23 NCEs entered phase I clinical trials in 2002 double the average number from Glaxo Wellcome and SmithKline Beecham combined in 1999 and 2000.
The number of compounds progressing in to phase II increased to 22, from an average of just four in the earlier period. By contrast, GSK's UK rival AstraZeneca has just 15 NCEs at either phase I or II in its pipeline.
The company has still not brought to market a major new product from its own pipeline since the merger in January 2001, and has embarked on an extensive in-licensing operation to boost its revenues.
One of the most immediately promising co-marketing agreements the company has forged is with Bayer for the impotence treatment Levitra, due to be launched this year.
The Deutsche Bank report is the second sign in recent weeks that the company is beginning to win back the confidence of analysts. Merrill Lynch has joined Deutsche Bank in upgrading GSK's stock to uy
Goldman Sachs has also recently declared the company's shares undervalued, saying its vulnerability to patent expiries has been exaggerated. The analysts forecast that by 2004 GSK should have absorbed most of its patent expiries and be less affected than other companies, with less than 5% of its sales affected between 2004-8.
