GlaxoSmithKline has announced that it is looking to cut R&D infrastructure costs as part of a bid to create additional annual pretax savings of £500 million by 2012.

A “significant proportion” of these new cost savings, split 50-50 between R&D and selling, general and administrative expenses “will be generated through reduction of infrastructure”, GSK chief executive Andrew Witty said. Amid reports that 4,000 jobs are likely to go, he added that “as before, we will not be providing targets for job reductions and we will announce restructuring outcomes once employees, relevant works councils and trade unions have been consulted”.

Speaking as GSK published its financials for the fourth quarter and full-year 2009, Mr Witty said “we ought to be continuously looking for how we might improve the rate of return on the investment money that shareholders allow us to commit to R&D”. This can be achieved by firstly reducing the amount of cost absorbed by fixed infrastructure, “the hangover of the creation of the modern R&D industry in the 1980s, lots of fixed buildings”. He claimed that “today, everything's much more virtual, more partnership-orientated”.

Secondly there are “specific areas of research where, for whatever reason, we just no longer believe we have the same likelihood of success, or perhaps the cost of being successful makes it unattractive compared to others”, Mr Witty said. As a result, GSK is reducing investment in the neuroscience area and ceasing discovery research in areas such as pain and depression.

Mr Witty added that “obviously I don't like to see anybody leave the organisation or there to be any job losses. But the reality is that, we do, from time to time, need to look at ways in which we can improve our probability of success”.

The company reported a 37% increase in operating profit, before restructuring charges, to £2.22 billion, while group turnover was up 13% to £8.09 billion, boosted by a 78% rise in vaccine sales to £1.52 billion, including pandemic vaccine sales of £836 million. The flu drug Relenza (zanamivir) contributed £256 million compared to just £13 million in the like, year-earlier period.

Generic competition across the Atlantic again tore into sales of epilepsy drug Lamictal (lamotrigine), which fell 27% to £132 million and migraine pill Imigran/Imitrex (sumatriptan), down 50% to £81 million. The Avandia (rosiglitazone) diabetes franchise brought in £191 million, down 17%, while revenues from GSK’s HIV franchise fell 3% to £412 million.

On the positive side, sales of Advair/Seretide (salmeterol and fluticasone) for asthma and chronic obstructive pulmonary disease were up 7% at £1.37 billion. Other strong performances came from Avodart (dutasteride), for the treatment of benign prostatic hyperplasia (+6% to £143 million), the heart disease drug Lovaza (omega-3-acid ethyl esters; +29% to £129 million) and the breast cancer drug Tykerb/Tyverb (lapatinib; 29% to £48 million).

There will be much more on GSK in tomorrow’s PharmaTimes World News elert.