Glaxo boss closes units to streamline firm’s research

Glaxosmithkline’s new boss Emma Walmsley today pledged to narrow the drugmaker’s research focus as part of a string of changes to streamline the group.

Walmsley, who took over from Sir Andrew Witty in March, called time on 30 pre-clinical and clinical trial programmes and promised to plough 80% of Glaxo’s spending into just four areas of research: respiratory, HIV, oncology and immuno-inflammation.

Glaxo said that, as part of its efforts to prioritise and allocate resources in research and development, it is “terminating development programmes that are unlikely to generate sufficient returns.”

The company also unveiled an extra £1 billion of cost cuts between now and 2020 and said it was considering offloading its rare diseases unit after a strategic review.

Walmsley said her priority was to “improve innovation, performance and trust in GSK”.

The FTSE 100 giant has struggled to boost growth in recent years, with several shareholders calling for the group to be broken up.

The group today said that total sales in the second quarter rose 3% to £7.3 billion but adjusted earnings per share fell 2% to 27.2p.

Last week, the company revealed plans to sell the Horlicks brand in the UK and end plans for a new factory in Cumbria.

Shares in the drugmaker fell 10.23p, or 0.64%, to 1570p.