GlaxoSmithKline to Double Its Workforce in Philadelphia

Published: Jun 17, 2015

GlaxoSmithKline to Double Its 1,500 Workforce in Philadelphia
June 11, 2015
By Mark Terry, BioSpace.com Breaking News Staff

U.K.-based GlaxoSmithKline announced plans to consolidate most of its research and development operations in North America, shifting much of it to Upper Providence, Penn., near Philadelphia.

The changes are expected to be completed by the end of 2019 and will more than double its 1,500 employees in the Upper Providence site.

In April 2014 the company announced a deal with Novartis AG , in which they plan to develop a joint consumer healthcare business. Novartis bought GSK’s oncology products for $14.5 billion, with an additional $1.5 billion to arrive with development milestones.

GSK paid $7.1 billion plus royalties for Novartis’ vaccines business, minus its flu business. This joint project is projected to generate $10.9 billion in annual sales.

GSK’s CEO Andrew Witty is under some pressure to turn the company around, although shareholders seem willing to give him a little time to do so.

Mr. Witty is running out of time,” said Stephen Bailey, a fund manager at Liontrust Asset Management Plc in London, in a Bloomberg article from May 11. “He’s either got to deliver in the next 12 months or step aside.”

Although the company’s pharmaceutical and vaccines sales in Emerging Markets grew by 5 percent and 1 percent in Japan lasts year, European sales were flat. In the U.S. sales dropped by 10 percent as the result of formulary and contract changes to Advair. The company has also been hammered by scandal and bad press.

On Sept. 19, 2014, the Changsha Intermediate People’s Court in southern China fined GSK about $500 million on bribery charges. In a related story, an investigator, Peter Humphrey, hired by GSK to investigate a sex tape of GSK China general manager Mark Reilly and his girlfriend, was arrested and imprisoned for illegally acquiring private records of Chinese citizens and selling it to GSK and other clients. Humphrey was released early from prison yesterday due to health issues.

The news of consolidation in Philadelphia today is a contrast to a March story, where GSK planned to lay off 150 people in the Philadelphia area. The restructuring at that point was expected to result in a loss of up to 900 jobs at the company’s facilities in Research Triangle Park, N.C., with, overall, plans to lay off about 1,050 people in the U.S.

Patrick Dougherty is GSK R&D’s global places program leader, and as such, is overseeing the restructuring.

“Philadelphia is a great place to be based as a global hub for biomedical research,” he said in a statement, citing proximity to an international airport and good housing and communities for staff.

As part of the plan, the Renaissance and West Campus location in Upper Merion, Philadelphia will be closed.

Most of the Research Triangle Park sites will be shuttered. A specialized facility in Upper Merion will remain in operation.

“That kind of consolidation, it’s to allow us to use the capital that we have to invest on the sites that we can invest it in a forward-looking direction,” Dougherty said in a statement. “For those sites for which we have a long term presence, we’ll be able to invest in to create the type of site environment that we want.”

Various other changes will involve GSK’s Collegeville-area facilities being renovated, with employees from other closed sites being moved to that location. The expectation is the employees will increase from 1,500 to 3,200 over the next four years.

When Will Pfizer's Breakup Happen?
Speculation that the revamping of Pfizer Inc. ’s internal business structure could happen as soon as this year has biotech wondering just when this Big Pharma company could see changes.

Last week an analyst with J.P. Morgan said he thinks there will be a much faster timeline than most of Wall Street had predicted for Pfizer’s stated mission to refocus its efforts on new medicines.

Pfizer initially announced in 2012 that it would be shedding units that were non-essential to that goal. It then promptly sold its nutrition silo to Nestle for $11.85 billion, which was rapidly accompanied by a public spin-off of its animal health business for $2.2 billion.

“While a Pfizer break-up would likely be a 2017 event, we see potential catalysts in 2015-2016," said Chris Schott, an analyst at J.P. Morgan. "Three years of audited financial statements (2014-2016) are required before any part of Pfizer can be spun off, and we also see 2017 as an attractive time for action as investors see Pfizer’s innovative pipeline clearly contributing to growth and the established business having transitioned to a more stable profile."

BioSpace wants to know what you think: Will Pfizer be a changed company by the end of 2015?

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