GlaxoSmithKline’s creation of new, smaller Drug Performance Units (DPUs) within its existing Centres of Excellence for Drug Discovery (CEDD) is an “evolution”, not an admission that the CEDD structure has failed to deliver, the company says.

“It worked well but we think we can make it work better,” a GSK spokesperson told PharmaTimes Clinical News, adding that the CEDD model had generated the R&D productivity gains anticipated when the new set-up was introduced following the merger of Glaxo Wellcome and SmithKline Beecham.

Announcing the R&D re-alignment in a presentation to investors last month, chief executive officer Andrew Witty stated: “The core of GSK has been and will remain pharmaceutical R&D. We must be relentless in our efforts to improve R&D productivity and this is why we have started to implement a new vision of our R&D organisation which is science-led and focused on value creation.”

Faced with a clutch of damaging patent expiries, threadbare late-stage pipelines and more intense payer demand for genuine innovation and cost-effectiveness from new therapies, a number of Big Pharma players have sought to emulate the achievements of the biotechnology sector by introducing smaller, more flexible and entrepreneurial R&D teams.

GSK already did this in 2001 when it formed the initial six CEDDs focused on specific disease groupings – cardiovascular and urogenital; metabolic and viral; microbial, musculoskeletal and proliferative (cancer); neurological and gastrointestinal; psychiatric; and respiratory and inflammatory diseases. Their function was to bridge the gap between discovery and development and to manage the progression of compounds in the ‘middle’ of the company’s pipeline.

A seventh CEDD, focused on biopharmaceuticals, was launched in 2003. And in 2005 GSK created a Centre of Excellence for External Drug Discovery (CEEDD), equipped with its own budget and portfolio (like the CEDDs) but relying mainly on external scientific resources. The idea was to move forward targets and compounds generated by GSK that might otherwise have to wait for development and to tap into new approaches to drug discovery.

The core therapeutic areas addressed by the CEDDs have now been adjusted following what Witty described as an “intensive review”. The R&D focus is now on immuno-inflammation, neuroscience, metabolic pathways, oncology, respiratory conditions, infectious disease, ophthalmology and biopharmaceuticals.

Go with the science

“R&D has to go where science is ripe and where new disease targets are plentiful,” GSK’s spokesperson commented. “The result is a rebalancing of the CEDDs’ therapy areas to focus on disease areas that offer the best chance of success.”

The Centre of Excellence for External Drug Discovery remains in place. At the investor presentation Witty highlighted a further 50 discovery programmes under evaluation in the CEDD and noted that GSK was looking to “substantially increase” its collaborations with external R&D partners.

“Externalising R&D enables GSK to capture scientific diversity and balance expenditure and risk in drug development,” he said. “In the future, we believe that up to 50% of GSK’s drug discovery could be sourced from outside the company.”


As Witty explained, the new Drug Performance Units will operate within the CEDDs with teams of between five and 80 scientists each. The CEDDs have around 400-600 scientists each, with varying numbers of DPUs within that framework. “We size them according to the people needed to do the science,” GSK’s spokesperson noted. Some CEDDs incorporate three to four DPUs, others more or fewer.

The DPUs concentrate their efforts on a given biological pathway, such as schizophrenia within the Neuroscience CEDD. The aim is that moving even further away from a monolithic R&D structure will reap dividends in terms of creativity and productivity. As with the CEDDs, the new units will only be taking compounds as far as the proof-of-concept stage.

“We believe that drug discovery is best optimised through research by small, focused teams,” Witty told investors. “Building on the success of our CEDDs, we have now pushed our organisational design further to increase product flow and value.”

Risks and rewards

Underlining the importance of an entrepreneurial environment for drug discovery, individual DPUs will compete for a total of US$1 billion per year in investment capital, to be allocated by a new global Drug Discovery Investment Board.

This board, which comprises senior GSK R&D leaders as well as external representatives of the venture capital and biotech/pharma investment sectors, will be charged with ensuring “that investment capital is allocated in a disciplined way”, GSK said. Capital will be awarded to the DPUs based on performance and value-creation metrics set against three-year business plans.

“The approach is borrowed from the venture capital world but is different in that GSK is acting as both the funder and recipient of the output,” the company’s spokesperson pointed out. GSK will “invest in the areas most likely to deliver value to the pipeline and the most significant clinical benefit. Plans will demonstrate focus and make clear what the value proposition is for GSK. They will be judged by their ambition and willingness to take risks.”

This emphasis will carry through to reward schemes for scientists. There has been criticism of incentive schemes that encourage researchers just to push drugs through development rather than weeding out potentially problematic or commercially limited candidates at an early stage.

While one of a number of reward schemes for R&D at GSK links directly to commercialisation milestones, Drug Discovery will introduce a system “that recognises success and ambitious risk-taking leading to innovation”, the spokesperson noted, adding: “Teams will also be held accountable for failure and poor decisions”.

The new R&D structure largely retains the six Medicine Development Centres (MDCs) introduced by GSK in 2004 to streamline decision-making and maximise the worldwide development opportunities for each product. The exception is the Musculoskeletal, Inflammation, Gastrointestinal and Urology (MIGU) MDC, whose assets were mostly biopharmaceutical. Accordingly, these have transferred to the biopharmaceutical or oncology R&D units.

The MDCs are responsible for managing compounds from proof of concept through Phase II and III trials to manufacturing and marketing. They collaborate at an early stage with the CEDDs.