Science in Small Hubs

While scientists in the research and development organizations of pharmaceutical companies labor to discover life-saving drugs, their managers try to make this notoriously hit-or-miss process more efficient. At GlaxoSmithKline, the world's second-largest drug company, executives are experimenting with a new formula they say combines the best of the company's massive size with the spirit of a smaller, entrepreneurial biotech firm. The Middlesex, UK-headquartered company created six research centers with therapeutic concentrations in 2001 following the merger of Glaxo Wellcome and Smith-Kline Beecham. These centers mimic nimble biotechs, with streamlined bureaucracy and direct financial incentives for scientists. But some observers question whether the centers will resolve research efficiency problems endemic to colossal pharmaceutical companies. "I hope this works," says Hemant Shah, a drug industry analyst with HKS & Co., of Warren, NJ. "But the problem is these companies are now looking for blockbuster drugs. They are attacking complex diseases and these [drugs] are not very easy to achieve. So it's been very difficult and will remain difficult to make a change." Scientist Liberation Courtesy of GlaxoSmithKlineCEO Jean-Pierre Garnier Called Centers of Excellence for Drug Discovery, or CEDD, the research groups range in size from 280 to 400 scientists, all with varied specialties working in close collaboration. "The whole reorganization had to do with liberating the scientists, letting them pursue their program with minimal encumbrances and no bureaucracy," says Jean-Pierre Garnier, CEO of GlaxoSmithKline. "We have lined up their behavior with the fact that we need products at the end of the channel. They benefit from their success. This is a unique case in big pharma. Garnier explains that, with sales last year of nearly $30 billion, the company has the financial resources to give it access to promising targets. GlaxoSmithKline has invested in genomics research that provides candidates for further exploration and in high-throughput screening and robotics equipment. But in the critical mid-stage of development, where compounds undergo early clinical testing, GlaxoSmithKline has established smaller, entrepreneurial entities. Company executives believe these centers can more effectively prepare a compound for testing in humans, or pronounce it dead quickly, saving resources for more promising work. Researchers in the CEDDs are responsible for pre-clinical and clinical testing, including toxicity tests, and molecule optimization. Once a potential drug is ready for full-blown clinical trials, Garnier says, GlaxoSmithKline's size again becomes an advantage. Unlike a start-up biotech, the corporation can run large-scale clinical trials for regulatory approval and has the marketing and sales operation to get the drug into patients' hands. The six centers are located in hubs at the company's existing research and development sites. The neurology center is at SmithKline Beecham's former site in Harlow; the respiratory disease and rheumatoid arthritis center is at the former Glaxo Wellcome labs in Stevenage. A psychiatry CEDD is located in Verona, Italy. The cardiovascular and urogenital center is in suburban Philadelphia's Upper Merion, Pa., campus, while its microbial, musculoskeletal, and cancer research is focused in the company's Upper Providence, Pa., offices. Metabolic and viral research is centered in Research Park Triangle, NC, the company's largest CEDD. Following the merger, Garnier created cash bonuses and stock options for work that can be tied to a new product. But the most important benefit of the streamlined centers for researchers may be the freedom. "Scientists tend to work better in small units. I'm all for that kind of an approach," says Janice Reichert, senior research fellow at Tufts University's Center for the Study of Drug Development in Medford, Mass. "Psychologically you feel you're making a more valuable contribution and you tend to get greater attention for your work in a small group." However, she cautions, managers still need to integrate workers. "A lot of scientists left to manage themselves would be like herding cats," she says. "You can easily lose control of this herd of cats." A Challenging Research Model Earlier this year, Tadataka Yamada, GlaxoSmithKline's chairman of research and development, fueled speculation in the British press that the company could eventually spin off one or more of the CEDDs in the future. Garnier, however, says Yamada's comments were overstated by the media and insisted the CEDDS are critical to the company's growth. "These CEDDs are absolutely core to our company," Garnier asserts. "We have the best scientists working in the CEDDs moving these products through the early part of the pipeline.... The last thing on our mind would be to spin them off." Analysts say it's too soon to predict whether streamlining will pay. "All of these companies keep trying in a serious way to improve their research and development productivity," Shah says. "The real problem with the industry is that there is lousy research productivity. They spend billions of dollars with very little to show for it." Garnier acknowledges the new research model faces challenges. "This is one of the most difficult processes any industry has to face," he says. "It exceeds the complexity of putting a rocket on the moon." But when working against bad odds, he adds, a slight improvement brings a strong upside. The company aims to improve productivity by a modest 10%. "When you lose 90% of compounds in the clinic," Garnier observes, "You don't need to improve productivity much to see a tremendous change in output." Susan Warner (swarner@comcast.net) is a freelance writer in Philadelphia.

Science in Small Hubs

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