GlaxoSmithKline plc (ADR) (NYSE:GSK) Is Reallocating Its Budget To Key New Drugs


GlaxoSmithKline plc (ADR) (NYSE:GSK) will be taking up a new challenge in a bid to remain within its focus.  The company’s new head of pharmaceuticals Luke Miels says that they ought to reallocate some money to priority medicines. Thus, the reason he threw a challenge to managers to work out budget savings of about 20 percent. The demand by Miels sounds tough and has caught hundreds of GSK’s veterans by surprise, given that a majority of them are more conversant with a consultative approach.

However, the demand could be for the better. It is likely that Miels is trying to bring back the glory of GSK whose shares have experience a sideshow for years.

GSK’s aim of concentrating on sales and marketing resources on new products

GSK, which is Britain’s biggest drugmaker, has been in stiff competition with AstraZeneca. It has also had to fight for its market share from the likes of Novartis and Merck & Co, which are producing multibillion-dollar blockbusters. Nonetheless, the company has taken on a new path, which entails putting together resources for marketing new products. It will also dig deeper into research and marketing of bigger new drugs.

The company will put more emphasizes on lung drug Trelegy and shingles vaccine Shingrix. Though Miels refused to give details about his budget demand, he did confirm that they are targeting 10 big markets in various parts of the world. The intention is to add the most value to patients. The strategy may not be visible right now but it will over time and as the process gets underway.

There are plans to streamline pharma R&D

GSK’s track record for bringing new drugs to market has been good. However, this is not the case with commercial performance. That said the pharma has renewed the urgency of streamlining the R&D, otherwise, it may not be able to deliver its next batch of products before 2020. Nonetheless, a considerable amount of cash is being put to work and particularly in the research for cancer.

Over the years, GSK has spent millions of dollars in building its presence with the main focus on T-cell receptors (TCRs). It is looking forward to launching new kinds of immunotherapy and cell therapies in 2020.


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