During its fourth-quarter results presentation Wednesday, GlaxoSmithKline announced a number of measures to boost investment in R&D and new product launches as it prepares to spin-off its consumer healthcare joint venture (JV) with Pfizer into a separate new company. The UK drugmaker completed the formation of the JV in August last year and now says it has started a two-year programme to ready itself for the split in 2022, which aside from the consumer health spin-off, will leave behind an R&D-focused biopharmaceutical company specialised in immune-system medicines, the use of genetics and new technologies.
According to GlaxoSmithKline, possible moves include divesting non-core assets, noting that it has undertaken a "strategic review" of the prescription dermatology business. As part of the two-year programme, the company said it is targeting annual savings of £700 million ($910 million) by 2022, with total costs estimated at £2.4 billion ($3.1 billion). It added that "anticipated divestment proceeds [are] largely expected" to cover the projected £1.6 billion ($2.1 billion) in cash costs for the programme.
CEO Emma Walmsley remarked that "in 2020, our first priority remains innovation, to progress our pipeline and support new product launches," adding that "recent data readouts underpin our decision to further increase investment in R&D and these new products." She stated that the measures "[aim] to support future growth, deliver significant value creation, and set up two new leading companies in biopharma and consumer healthcare."
Meanwhile, GlaxoSmithKline indicated that it intends to cut up to 720 jobs from its vaccine units in Belgium. Spokesperson Elizabeth Van Damme noted that the figure was a maximum forecast, adding "these are mainly executive positions. About 215 temporary contracts will likely not be renewed."
According to GlaxoSmithKline, "several departments…will be affected by this transformation project, including R&D, manufacturing and quality control, as well as global support functions." Last October, the company began cutting a number of management functions at its Wavre and Rixensart sites from its vaccines operations in Belgium. The Wavre site employs about 7000 workers, delivering more than 2 million doses of vaccine every day to 160 countries. The R&D department at Rixensart employs around 1000 people, while another 100 staffers work at GlaxoSmithKline's facility located in Gembloux.
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