After announcing major job cuts, most notably in R&D, GlaxoSmithKline chief executive Andrew Witty has been explaining in more detail his plans for the group going forward.

Speaking after GSK presented a solid set of financials for the fourth quarter and full-year 2009, Mr Witty noted that despite its off-patent drugs suffering in the USA, “we've seen a return to sales growth for the first time since 2007”. That was helped by its consumer business growing 7% in 2009, and the CEO said that it is “an incredible performance…the fastest growth of any consumer company in the world”.

As for research, Mr Witty said that “if you want a shareholder to give you permission to spend £3-£3.5 billion on R&D, it's only reasonable that there should be some sense of what the return rate might be”. He added that "as an industry over the last 10 or 15 years, the return rates from R&D spend hasn't been very good. That's why many companies have been facing a drought in their pipeline”.

Now at GSK, he said “we're not suffering from that” and “we have a late-stage pipeline which, if it delivers what we expect it to over the next ten, 15, 20 years of sales, is capable of delivering around an 11% rate of return”. Mr Witty said that it is “not bad”, but by being efficient, that rate of return could be improved to “somewhere around 14%”.

He added that 2010 will see continuing growth in GSK’s consumer business, emerging markets and the introduction of some new products as the “pharma pipeline starts to deliver more and more”.

In the main, analysts like the look of GSK at the moment. Jeremy Batstone-Carr at Charles Stanley says “we remain of the view that GSK can deliver on its ongoing restructuring programme going forward and that emerging markets will play an even greater role in the generation of stable and sustainable revenue in the future” He added that the firm is “an island of relative tranquillity in a market characterised by falling risk appetite”.