GSK shuffling R&D units

GlaxoSmithKline plc (LSE:GSK; NYSE:GSK) completed a review of its 38 Discovery Performance Units (DPU) and said it will cut three of them, while adding four. GSK, which made the announcement along with its 4Q11 financial results, added that six of the units will receive at least a 20% increase in funding while five others will see their budgets decrease by a similar amount. The overall drug discovery budget will remain unchanged. GSK plans to provide more details on the DPU changes at an investor and analyst meeting scheduled for March 29. GSK implemented the DPU model in 2008 to improve R&D efficiency. The DPUs consist of 5-70 scientists focused on a specific disease or pathway.

GSK said its return on R&D investment is now about 12%, up from 11% in 2010 as a result of cost reductions and reduced late stage attrition. The pharma said it is on track to reach its long-term goal of a 14% return. In 2012, GSK expects core R&D spending to be around the same level as in 2011, which was about L3.7 billion ($5.7 billion). ...