Glaxo cutting research jobs

Scientists and other research workers at GlaxoSmithKline PLC's King of Prussia and Collegeville facilities are getting their pink slips this week.

The British drugmaker, which has a U.S. headquarters in Philadelphia, is cutting 2 percent of its 17,000 global research and development employees, or about 350, with about half of them in this region and at the other U.S. headquarters in Research Triangle Park, N.C., spokeswoman Melinda Stubbee said.

The rest of the cuts will come from facilities in the United Kingdom and Italy.

"For research and development specifically, it's about reshaping R&D so we can improve our productivity," she said.

The cuts come as part of plans announced in October by the world's second-largest drugmaker (after Pfizer Inc.) to save $1.37 billion by 2010 by trimming jobs in sales, manufacturing and research.

Meanwhile, Glaxo has opened a facility in China in the last year that houses 400 researchers specializing in neuroscience, Stubbee said. But she said that job cuts in Europe and the United States are not related to Glaxo's growth in Asia.

Glaxo employs about 5,700 in the Philadelphia area.

Glaxo's chief executive has been in the job for less than a month: Andrew Witty took over from Jean-Pierre Garnier on May 22.

Times are rough for big pharma. Almost all big pharmaceutical companies have announced layoffs in the last year: GlaxoSmithKline, Wyeth, AstraZeneca, Merck.

All major pharmaceutical companies face the same problems: Their big blockbuster drugs, those with revenues of $1 billion and more, are coming off patent protection and being copied in lower-cost chemically equivalent versions by generic drug makers.

Several of Glaxo's best-sellers are losing patent protection this year.

Big pharma companies do not have enough new drugs ready to go to replace those sales. In addition, it's harder to get new drugs approved by the Food and Drug Administration since Vioxx was withdrawn by Merck because of deaths and side effects.

Pharmaceutical companies' own research labs are not producing enough internally, and drug companies are turning for promising products to small biotechnology companies - either acquiring or licensing outright small biotechs' products.

The news of the cuts follows the disclosure earlier this week that Glaxo plans to restructure its research and development operations into smaller units. These units will focus on specific diseases and will be rewarded based on performance.

Glaxo had previously split its research operations into therapeutic areas in a move to boost innovation and bring new drugs into the market. Glaxo now has 157 projects under development, according to its annual report. Of these 118 are vaccines and 34 are in late-stage development.

Other pharmaceutical companies have also started reorganizing their research and development units to reflect new scientific breakthroughs and a more demanding marketplace.

AstraZeneca PLC, the second-largest British drugmaker, spun off part of its gastrointestinal research operation into a new firm called Albireo earlier this year, following its decision to focus its efforts on respiratory, cancer and infectious diseases.

Company shares were priced this morning at $41.40 on the New York Stock Exchange, down $0.32 (0.77 percent).