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Witty reviews GSK priorities

GlaxoSmithKline's CEO, Andrew Witty, has reported a return to sales growth in 2009 and confidence in the company's prospects in 2010

GlaxoSmithKline's (GSK) chief executive officer, Andrew Witty, has reported a return to sales growth in 2009 and confidence in the company's prospects in 2010.

GSK has focused on growing a diversified global business, delivering more products of value and simplifying its operating model. 

In his latest review, Witty highlighted the drive to expand in emerging markets, consumer healthcare and vaccines.

"Our strategy is delivering and I believe that GSK is now moving to a position where we can deliver our goal of long-term sustainable financial performance," he stated as the company's Q4 results were announced.

Pharmaceutical sales in emerging markets grew 20 per cent and now represented 10 per cent of group turnover, he added.   

In consumer healthcare, sales were up seven per cent for the year, compared to overall market growth of around two per cent. This had been driven by sustained investment and brand innovation, Witty pointed out.

He believed increased diversification was helping to reduce volatility, and acknowledged that influenza product sales to governments for the H1N1 pandemic had also helped the company offset competition from generics in the US.

Last year, GSK received 12 product approvals and completed 11 new filings. Over the next 18 months, the company could potentially launch six new medicines and vaccines, he continued, pointing to Benlysta, which would be the first new treatment for systemic lupus in over 50 years. The goal was to maintain around 30 assets in the company's late-stage pipeline.

"We continue to focus strongly on making better decisions around pipeline progression. In 2009, for example, we elected not to progress six assets which, despite passing basic efficacy and safety hurdles, did not meet our new criteria around potential for differentiation," Witty continued.  

Almost a third of GSK's discovery research was already conducted with external partners and the goal was to continue this trend through more option-based agreements.

Further, Witty announced the creation of a standalone unit specialising in the development and commercialisation of rare disease medicines.

GSK also planned to cease discovery research in selected neuroscience areas, including depression and pain, to focus on neurodegenerative and neuroinflammatory diseases like Alzheimer's disease, multiple sclerosis and Parkinson's disease.

Further restructuring would be undertaken to deliver additional annual pre-tax savings of £500m by 2012, a significant proportion of which would be generated through reducing infrastructure.

"I believe that our strategy is delivering and GSK's long-term prospects are improving," Witty concluded.

Subsequently, in line with its restructuring announcement, GSK has started consultations over possible job cuts at its Harlow research facility in the UK. According to the UK Press Association, as many as 380 of the 1,150 employees there could be affected.

10th February 2010

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