The only way is biotech

For pharmaceutical firms across the world, the business model of creating blockbuster drugs in-house is dead and buried. But quite what to do now is not so easy to answer. Elizabeth Gibney reports.

It is hard to pinpoint when the death of ‘big pharma’ R&D hit home in the UK. Whether it was the closure of Pfizer’s European R&D headquarters in Sandwich last year or the demise of AstraZeneca’s Charwood site the year before, every firm has now woken up to the reality that with an increasing number of drugs falling at the last hurdle, research costs are spiralling while patent profits dwindle.

Each company is tackling the issue in a different way. Announcing its 2011 results last week, GlaxoSmithKline also published a first review of its latest R&D scheme—funding work through Discovery Performance Units. Introduced in 2008, the firm’s 38 DPUs are intended to function like small biotech firms, each housing between five and 70 researchers focusing on a specific disease or pathway.