|Type||Public limited company|
|Traded as||LSE: GSK
|Predecessor(s)|| Glaxo Wellcome plc
SmithKline Beecham plc
|Headquarters||London, United Kingdom|
|Key people|| Chris Gent (Chairman)
Andrew Witty (Chief Executive)
|Products||Pharmaceuticals, vaccines, oral healthcare products, nutritional products, over-the-counter medicines|
|Revenue||£26.431 billion (2012)|
|Operating income||£7.392 billion (2012)|
|Net income||£4.744 billion (2012)|
GlaxoSmithKline plc (GSK) is a British multinational pharmaceutical, biologics, vaccines and consumer healthcare company headquartered in London, United Kingdom. It is the world's fourth-largest pharmaceutical company measured by 2009 prescription drug sales (after Pfizer, Novartis, and Sanofi). It was established in 2000 by the merger of Glaxo Wellcome plc (formed from the acquisition of Wellcome plc by Glaxo plc) and SmithKline Beecham plc (formed from the merger of Beecham plc and SmithKline Beckman Corporation, which was formed by combining the Smith Kline French and Beckman companies).
GSK has a portfolio of products for major disease areas including asthma, cancer, virus control, infections, mental health, diabetes and digestive conditions. It also has a large consumer healthcare division that produces and markets oral healthcare and nutritional products, drinks and over-the-counter medicines, including Sensodyne, Boost, Horlicks, Lucozade, Ribena and Gaviscon.
In July 2012, GSK pleaded guilty to criminal charges and agreed to a $3 billion settlement of the largest health-care fraud case in the U.S. and the largest payment by a drug company in the US.The settlement was related to the company's illegal promotion of prescription drugs, its failure to report safety data, bribing doctors, and promoting medicines for uses for which they were not licensed.
GSK has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. As of 6 July 2012, it had a market capitalisation of £74.8 billion, the fifth-largest of any company listed on the London Stock Exchange. It has a secondary listing on the New York Stock Exchange.
GSK was formed in 2000 by the merger of Glaxo Wellcome plc (formed from the acquisition of Wellcome plc by Glaxo plc), and SmithKline Beecham plc (formed from the merger of Beecham plc and SmithKline Beckman Corporation).
In 1880, Burroughs Wellcome & Company was founded in London by the American pharmacists Henry Wellcome and Silas Burroughs. The Wellcome Tropical Research Laboratories opened in 1902. In 1959, the Wellcome Company bought Cooper, McDougall & Robertson Inc. to become more active in animal health. The Wellcome Company production centre was moved from New York to North Carolina in 1970, and the following year another research centre was built. Glaxo was founded in Bunnythorpe, New Zealand, in 1904. Originally Glaxo was a baby food manufacturer processing milk into a baby food of the same name: the product was sold under the slogan "Glaxo builds bonny babies" from 1908. Still visible on the main street of Bunnythorpe is a dairy factory (factory for drying and processing cows' milk into powder) with the original Glaxo logo clearly visible, it is now a car repair shop.
Glaxo became Glaxo Laboratories, and opened new units in London in 1935. Glaxo Laboratories bought two companies, Joseph Nathan and Allen & Hanburys, in 1947 and 1958 respectively. After the company bought Meyer Laboratories in 1978, it started to play an important role in the US market. In 1983 the American arm Glaxo Inc. moved to Research Triangle Park (US headquarters/research) and Zebulon (US manufacturing) in North Carolina. Burroughs Wellcome and Glaxo merged in 1995 to form GlaxoWellcome. In the same year, GlaxoWellcome opened its Medicine Research Centre in Stevenage. Three years later GlaxoWellcome bought Polfa Poznan Company in Poland.
In 1843, Thomas Beecham launched his Beecham's Pills laxative in England giving birth to the Beecham Group. Beecham opened its first factory in St Helens, Lancashire, England for rapid production of medicines in 1859. The original factory was closed in 1994 and passed to the local college for re-development. By the 1960s, Beecham was extensively involved in pharmaceuticals.
In 1830, John K. Smith opened its first pharmacy in Philadelphia. In 1865, Mahlon Kline joined the business which 10 years later became Smith, Kline & Co. Subsequently, in 1891, it merged with French, Richard and Company. It changed its name to Smith Kline & French Laboratories as it focused more on research in 1929. Years later, Smith Kline & French Laboratories opened a new laboratory in Philadelphia; it then bought Norden Laboratories, a business doing research into animal health.
Smith Kline & French Laboratories bought Recherche et Industrie Thérapeutiques (Belgium) in 1963 in order to focus on vaccines. The company started to expand globally, buying seven laboratories in Canada and the US in 1969. In 1982, it bought Allergan, a manufacturer of eye and skincare products. The company merged with Beckman Inc. later that year and changed its name to SmithKline Beckman.
In 1988, SmithKline Beckman bought its biggest competitor, International Clinical Laboratories, and in 1989 merged with Beecham to form SmithKline Beecham plc. The headquarters of the company was moved to England. To expand research & development in the US, SmithKline Beecham bought a new research centre in 1995. Another new research centre at New Frontiers Science Park in Harlow was opened in 1997.
2000 to 2011
Glaxo Wellcome and SmithKline Beecham announced their intention to merge on 17 January 2000. Following receipt of necessary regulatory approvals, the merger was completed in December 2000, forming GlaxoSmithKline.
In 2001, GSK completed the acquisition of New Jersey-based Block Drug for US$1.24 billion. In July 2002 GSK House, located in Brentford, London, was officially opened as GSK's new world headquarters by then-Prime Minister Tony Blair. The building was built at a cost of £300 million and is home to around 3,000 staff. In October 2006 GSK acquired the US-based consumer healthcare company CNS Inc., whose products included Breathe Right nasal strips and FiberChoice dietary fibre supplements, for US$566 million in cash. GSK opened its first R&D centre in China in May 2007, located in Shanghai and initially focused on neurodegenerative diseases.
Since 2008, GSK has been running clinical trials of a new malaria vaccine. The vaccine, which is known as RTS,S, has been in development for more than 25 years, at first for the American military and then with major support from the Bill and Melinda Gates Foundation. The clinical trial is scheduled to continue through 2014 and will include tests on more than 15,000 children, starting at infancy.
In February 2009, GSK head Andrew Witty announced that the company would cut drug prices by 25% in 50 of the poorest nations, release intellectual property rights for substances and processes relevant to neglected disease into a patent pool to encourage new drug development, and invest 20% of profits from the least developed countries in medical infrastructure for those countries. The decision has received mixed reactions from medical charities. Médecins Sans Frontières welcomed the decision, encouraging other companies to follow suit, but criticised GSK for failing to include HIV patents in their patent pool, and for not including middle-income countries in the initiative.
In April 2009 GSK agreed to acquire the US-based dermatological pharmaceuticals company Stiefel Laboratories for US$3.6 billion (£2.5 billion).
On 16 November 2009, the US Food and Drug Administration (FDA) announced that a vaccine for 2009 H1N1 influenza protection (manufactured by GSK's ID Biomedical Corp. subsidiary) would join the four vaccines approved on 15 September. In June 2010, the company acquired Laboratorios Phoenix, an Argentine pharmaceutical company focused on the development, marketing and sale of branded generic products, for a cash consideration of approximately $253m.
In November 2009, GlaxoSmithKline formed a joint venture with Pfizer to create ViiV Healthcare. Viiv Healthcare received all of Pfizer and GlaxoSmithKline's HIV assets. ViiV Healthcare is 85% owned by GlaxoSmithKline and 15% owned by Pfizer. In December 2010, GSK announced its acquisition of the UK-based sports nutrition company Maxinutrition for £162 million (US$256 million).
2011 to present
In February 2011, GSK announced plans to sell some "non-core" brands. In December 2011, the company agreed to a $660 million deal with Prestige Brands Holdings, which will take over 17 brands with sales of $210 million, including BC Powder, Beano, Ecotrin, Fibre Choice, Goody's Powder, Sominex, and Tagamet. In March 2012 GSK announced plans to invest around £500 million in manufacturing facilities in Ulverston, northern England, designating it as the site for a previously announced biotech plant.
GSK made a US$2.6 billion (£1.6 billion) offer for the United States-based biopharmaceutical company Human Genome Sciences in April 2012.
GSK employs 97,000 people worldwide of whom about 12,500 work in research and development. Its global headquarters are GSK House in Brentford, United Kingdom, with its United States headquarters based in Research Triangle Park in North Carolina and its consumer products division based in the Pittsburgh suburb of Moon Township, Pennsylvania. The research and development division has major facilities in South East England, Philadelphia and Research Triangle Park in North Carolina. GSK has a presence in 99 cities across 39 countries.
GSK's single largest market is in the United States, which generates approximately 45% of its revenues, although the company sells its products in around 70 countries.
Other major GSK facilities include:
- Major R&D sites in Stockley Park, Stevenage and Ware in the UK; Zagreb, Croatia; Évreux and Les Ulis in France; Shanghai, China; Research Triangle Park, North Carolina; Laval, Quebec and Collegeville, Pennsylvania. Stevenage has been the scene in movie production portraying the headquarters of the Central Intelligence Agency. (CIA)
- Major centre for biopharmaceutical products in Belgium ( Wavre and Rixensart), Germany (Dresden), Canada (Quebec City), USA (Marietta, Pennsylvania and Hamilton, Montana) and Hungary (Gödöllő)
- R&D centres in India, located at Thane, Maharashtra and Nashik, Maharashtra
- Major manufacturing sites for prescription products in Irvine, Ware, Montrose, Barnard Castle, Worthing, and Ulverston in the UK; Évreux, France; Bristol, King of Prussia and Zebulon in the US; Cidra, Puerto Rico; Jurong, Singapore; Cork, Ireland; Poznań, Poland; Parma, Verona Italy; Brașov, Romania; Boronia, Australia, Brussels, Belgium.
- Major manufacturing sites for consumer products in Maidenhead, UK; Dungarvan, Ireland; Mississauga, Ontario; Aiken, South Carolina; Clifton, New Jersey; St. Louis, Missouri; and Kenya.
GSK produces and sells a wide range of prescription-only and over-the-counter medications, as well as consumer products such as drinks and toothpaste. Its top-selling prescription drugs include the anti-depressant Paxil, which had attracted $11.6 billion in sales by 2012, the diabetes drug Avandia at $10.4 billion, the anti-depressant Wellbutrin at $5.9 billion, the asthma drugs Advair, Flovent and Ventolin, and the H2-antagonist Zantac.
Its over-the-counter health care products include Abreva to treat cold sores; the oral hygiene products Aquafresh, Biotene, Maclean's and Sensodyne; Night Nurse; Breathe Right nasal strips; and Nicorette, a nicotine replacement. It also sells a number of drinks, including Horlicks, a malted milk drink, Lucozade, an energy drink, and Ribena, a fruit drink.
GSK's current products include:
GSK's stock is listed on the London stock exchange and ADRs are listed on the NYSE.
As of December 2012, the current members of GSK's board of directors are:
- Chris Gent (non-executive chairman)
- Andrew Witty (chief executive officer, executive director)
- Roy M. Anderson (non-executive director)
- Stephanie Burns (non-executive director)
- Stacey Cartwright (non-executive director)
- Crispin Davis (non-executive director)
- Simon Dingemans (chief financial officer)
- Lynn Elsenhans (independent non-executive director)
- Judy Lewent (independent non-executive director)
- Deryck Maughan (independent non-executive director)
- Daniel Podolsky (independent non-executive director)
- Moncef Slaoui (chairman, R&D)
- Tom de Swaan (independent non-executive director)
- Jing Ulrich (non-executive director)
- Robert Wilson (Senior independent non-executive director)
GSK has been active, with the World Health Organization, in the Global Alliance to Eliminate Lymphatic Filariasis (GAELF). Around 120 million people globally are believed to be infected with lymphatic filariasis.
The company received a perfect score of 100 percent from the Human Rights Campaign Foundation's 2008 Corporate Equality Index, an annual report card of corporate America's treatment of gay, lesbian, bisexual, and transgender (GLBT) employees, customers and investors.
On 14 June 2007, an article was published by Steve Nissen, Chair of the Division of Cardiovascular Medicine at the Cleveland Clinic in the New England Journal of Medicine. This meta-analysis showed an increased odds ratio of myocardial infarction in patients taking rosiglitazone marketed as Avandia. More recently, the New York Times published an article detailing Nissen's conversation with pharmaceutical executives. These conversations were recorded unbeknownst to the GSK executives but are legal in the State of Ohio as long as one participating party is aware. Subsequently, a Congressional investigation was initiated to determine what information was known at the time of the approval of rosiglitazone as well as post approval and whether or not GSK wilfully suppressed such information. In November 2007, a United States congressional committee released a report describing intimidation of Dr John Buse ( University of North Carolina at Chapel Hill) by GlaxoSmithKline over his concerns about the cardiovascular risks associated with the company's anti-diabetes drug rosiglitazone (Avandia). In February 2010, GlaxoSmithKline tried to suppress publishing of a critical article concerning rosiglitazone. In July, a US Finance Committee Letter asserted GSK had "to publish studies in a timely manner that found problems with Avandia". Based on data that suggested an elevated risk of heart attacks, the FDA made a decision to restrict access to rosiglitazone medicines on September 23, 2010.
Paroxetine (Seroxat, Paxil) is an SSRI anti-depressant released in 1992 by GlaxoSmithKline (GSK). For 10 years, GSK marketing of the drug stated that it was "not habit forming," which numerous experts and at least one court found to be incorrect. Since the FDA approved paroxetine in 1992, approximately 5,000 U.S. citizens have sued GSK. Most of them believe they were not sufficiently warned of the drug's side effects, particularly the withdrawal syndrome, because GSK had specifically advertised the drug as non-habit forming. Since 2001 in the UK, lawsuits have been filed representing people who have been prescribed Seroxat. They allege that the drug has serious side effects, which GlaxoSmithKline downplayed in patient information. In 2001, the BBC reported the World Health Organization had ranked paroxetine as the most difficult antidepressant to withdraw from. In 2002, the U.S. FDA published a new product warning for the drug, and the International Federation of Pharmaceutical Manufacturers Associations said GSK had misled the public about paroxetine and breached two of the Federation's codes of practice.
In early 2004, GSK agreed to settle charges of consumer fraud for $2.5 million. The legal discovery process also uncovered evidence of deliberate, systematic suppression of unfavorable Paxil research results. A 1993–1996 GSK study showed that Paxil was no more effective than placebo in treating depression in children and another study showed that placebo was actually more effective than the antidepressant. however one of GSK's internal documents stated, "It would be commercially unacceptable to include a statement that efficacy [in children] had not been demonstrated, as this would undermine the profile of paroxetine".
In June 2004, FDA published a violation letter to GSK in response to a "false or misleading" TV ad for Paxil CR; FDA stated, "This ad is concerning from a public health perspective because it broadens the use of Paxil CR [beyond the conditions it was approved for] while also minimizing the serious risks associated with the drug." GSK claimed the ad had been previously reviewed by FDA, but said the ad would not run again.
In March 2008 the Medicines and Healthcare Products Regulatory Agency concluded that GSK should have warned of the possible ill effects of taking Seroxat sooner. As of 2008, GlaxoSmithKline's prescribing information acknowledges that "serious discontinuation symptoms" may occur. The court documents released as a result of one of the lawsuits in October 2008 indicated that GSK "and/or researchers may have suppressed or obscured suicide risk data during clinical trials" of paroxetine. In 2012 the U.S. Justice Department announced that GSK had agreed to plead guilty and pay a $3 billion fine, in part for illegally promoting the use of Paxil for children even though the FDA never approved it for anyone under age 18.
SB Pharmco Puerto Rico Inc. closure
In October 2010 the U.S. Department of Justice announced that GSK would pay $150 million in criminal charges, at that time the largest such payment ever by a manufacturer of adulterated drugs, and $600 million in civil penalties. GSK agreed to pay the settlement in response to criminal and civil complaints against the company stemming from production of improperly made and adulterated drugs at their subsidiary SB Pharmco Puerto Rico Inc. in Puerto Rico, which at the time was GLKs premier manufacturing facility, producing $5.5 billion of product each year. According to the government report, for years GSK had knowingly sold contaminated baby ointment and an ineffective antidepressant, Paxil CR.
According to the report the case began in 2002 when GSK sent a team of quality experts to fix problems cited by an F.D.A. warning letter a month earlier. The quality control at the plant was found to be "a mess: the water system was contaminated; the air system allowed for cross-contamination between products; the warehouse was so overcrowded that rented vans were used for storage; the plant could not ensure the sterility of intravenous drugs for cancer; and pills of differing strengths were sometimes mixed in the same bottles." The lead inspector repeatedly complained to senior managers and recommended recalls of defective products, but they were not authorized. In 2003 she was terminated as a “redundancy.” She eventually notified the FDA and sued. In 2005 federal marshals seized $2 billion worth of products, the largest such seizure in history. Unable to fix the plant, GSK closed it in 2009.
Health-care fraud settlement
On 2 July 2012, GSK pleaded guilty to criminal charges and agreed to a $3 billion settlement related to the company's illegal promotion of prescription drugs, its failure to report safety data, bribing doctors, and promoting medicines for uses for which they were not licensed. The government investigation of GSK was launched largely on the basis of information provided by four whistleblowers who filed two qui tam (whistleblower) lawsuits against the company under the False Claims Act. GSK settled the whistleblowers’ lawsuits for a total of $1.017 billion out of the $3 billion settlement, the largest civil False Claims Act settlement to date.
The settlement is the largest health-care fraud case in U.S. history and the largest payment by a drug company. The drugs involved were Paxil, Wellbutrin, Advair, Lamictal, and Zofran for off-label, non-covered uses. Those and the drugs Imitrex, Lotronex, Flovent, and Valtrex were involved in a kickback scheme in which GSK had attempted to influence doctors by paying for "every imaginable form of high-priced entertainment, from Hawaiian vacations [and] paying doctors millions of dollars to go on speaking tours, to tickets to Madonna concerts". They also claimed that GSK had aimed at promoting the use of the drug Paxil in children by helping to publish a medical journal article that misreported data from a clinical trial.
- In 2003, GSK signed a corporate integrity agreement and paid $88 million in a civil fine for overcharging Medicaid for the anti-depressant Paxil, and nasal-allergy spray Flonase. Also in 2003, it was reported that GSK owed the Internal Revenue Service (IRS) $7.8 billion in backdated taxes and interest, the highest in IRS history.
- In March 2006, California Attorney General Bill Lockyer announced that "GlaxoSmithKline (GSK) will pay $14 million to resolve allegations that state-government programs paid inflated prices for the firm’s anti-depressant drug Paxil because GSK engaged in patent fraud, anti-trust violations and frivolous litigation to maintain a monopoly and block generic versions from entering the market."
- On 12 September 2006, GSK settled the largest tax dispute in IRS history, agreeing to pay $3.1 billion. At issue in the case were Zantac and the other Glaxo Group heritage products sold in 1989–2005. The case was about an area of taxation dealing with intracompany "transfer pricing"—determining the share of profit attributable to the US subsidiaries of GSK and subject to tax by the IRS. Taxes for large multi-divisional companies are paid to revenue authorities based on the profits reported in particular tax jurisdictions, so how profits were allocated among various legacy Glaxo divisions based on the functions they performed was central to the dispute in this case.
- On 27 March 2007, GSK pleaded guilty in an Auckland District Court to 15 charges relating to misleading conduct brought under the Fair Trading Act by New Zealand's Commerce Commission. The charges related to the popular blackcurrant fruit drink Ribena, which the company had led consumers to believe contained high levels of vitamin C. As part of a school science project, Anna Devathasan and Jenny Suo, 14-year-old schoolgirls from Pakuranga College in Auckland, discovered that ready-to-drink juice sold in 100ml containers contained very little vitamin C. Approaches by the two teens to the company did not resolve the issue, and after the matter was publicised on national consumer affairs television show Fair Go it came to the attention of the Commerce Commission. The commission's testing found that ready-to-drink Ribena contained no detectable vitamin C.
- The company was fined $217,000 for the 15 charges. The number of charges was reduced from 88 and covered the period from March 2002 to March 2006. GSK maintains that it did not intend to mislead consumers and that the advertising claims were based on testing procedures that have since been changed. It was ordered to run an advertising campaign to provide the facts after it admitted misleading the public about the vitamin C component in its Ribena drink. Through its lawyer, Adam Ross, the company accepted Commerce Commission allegations that claims that ready-to-drink Ribena contained 7 mg of vitamin C per 100ml, or 44% of the recommended daily intake, were incorrect. The company also agreed television advertising claiming the blackcurrants in Ribena had four times the vitamin C of oranges, while literally true, were likely to mislead consumers about the relative levels of vitamin C in Ribena.