GSK appoints scientist Barron as new Research and Development head

LONDON: GlaxoSmithKline (GSK) has poached veteran drug industry scientist Hal Barron from Alphabet-funded Calico to be its research head as new Chief Executive Emma Walmsley steps up her drive to improve productivity.

Barron, who worked for Roche for many years before joining the new Google venture set up to tackle age-related health issues, will replace Patrick Vallance, who is taking up the post of chief scientific adviser to the British government.

GSK has lagged behind rivals in recent years in producing multibillion-dollar blockbuster drugs. It has also suffered a number of high-profile clinical trial failures on Vallance's watch, undermining faith in its R&D skills.

Walmsley said the appointment of Barron as president of R&D and a board member from Jan. 1 was a "very significant" move for Britain's biggest drugmaker.

"This underscores the absolute, unequivocal prioritization I'm placing on improving our performance in our biggest business, which is pharma," she told Reuters on Wednesday. "Pharma R&D and the pipeline is at the heart of that."

GSK shares ended 1.5 percent higher in a broadly flat market.

Vallance's departure had been expected after a source familiar with the matter said last week he was quitting for the top British science post.

His planned exit, at the end of March 2018, comes after Walmsley said in July she would narrow the focus of GSK's drug research by ditching more than 30 drug projects.

GSK will in future allocate 80 percent of its R&D budget to respiratory and HIV/infectious diseases, along with two other potential areas of oncology and immuno-inflammation.

CANCER FOCUS?

The appointment of Barron will stoke speculation that cancer may soon be confirmed as a third official therapy focus, given his role in overseeing a range of blockbuster cancer drugs at Roche, including Avastin, Tarceva, and Perjeta.

Although GSK sold its marketed cancer drugs to Novartis in 2015, it continues to invest in early-stage research and has recently made advances with a promising blood cancer drug.

Walmsley said it would be up to Barron to decide where to invest once he joined the company in the new year, but she added his experience in oncology and in specialty therapy areas was "highly exciting".

Significantly, Barron will remain based in San Francisco, where GSK will have a new office focused on deal-making opportunities in drug research.

Barron will be paid a base salary of $1.7 million, with a bonus of $1.7 million and an expected $4.25 million in long-term incentive plan stock awards.

Walmsley's plans for overhauling GSK have yet to fully convince investors, many of whom worry the dividend could be at risk if she twins a revamp of pharma with a big acquisition in consumer healthcare.

She declined to comment any further on the dividend or her potential interest in Pfizer's consumer health division, beyond noting the U.S. company had yet to make a definitive decision on selling the unit.

Barron is Walmsley's third key appointment, following her hiring of Luke Miels from AstraZeneca as head of pharmaceuticals and former Wal-Mart Stores executive Karenann Terrell as chief digital and technology officer.

Barron and Miels both have experience working together at Roche and Walmsley said their partnership would help forge closer ties between commercial operations and drug R&D.

(Reporting by Ben Hirschler; Editing by Edmund Blair and Mark Potter)