GSK to make further R&D cuts

Announcing its financial results for the year ended 31st December, GSK said it would cease discovery research in selected neuroscience areas, including depression and pain to focus research on conditions such as Alzheimer's, Multiple Sclerosis and Parkinson's disease where it believed the prospects for successful registration and launch of differentiated medicines were greater. "We are also looking to reduce R&D infrastructure costs," said CEO Andrew Witty. "Today we have announced an expansion of GSK's restructuring programme to deliver additional annual pre-tax savings of £500 million by 2012. A significant proportion of these new cost savings will be generated through reduction of infrastructure. Approximately 70% of these new savings will be directed to the bottom line to enhance profitability. We remain very conscious of the impact restructuring has on our employees. Where possible, we will continue to try to preserve jobs. 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." Turnover for the year was £28.4 billion (2008: £24.3bn) while pre-tax profit rose to £7.9 billion (2008: £6.7bn) "2009 saw GSK return to sales growth and I am confident of our prospects in 2010," concluded Witty.