GlaxoSmithKline

Glaxo Wellcome

Glaxo was founded in the 1850s as a general trading company in Bunnythorpe, New Zealand, by a Londoner, Joseph Edward Nathan. In 1904 it began producing dried-milk baby food, first known as Defiance, then as Glaxo (from lacto), under the slogan "Glaxo builds bonny babies." The Glaxo Laboratories sign is still visible (right) on what is now a car repair shop on the main street of Bunnythorpe. The company's first pharmaceutical product, produced in 1920, was vitamin D.

Glaxo Laboratories opened new units in London in 1935. The company bought two companies, Joseph Nathan and Allen & Hanburys in 1947 and 1958 respectively. The Scottish pharmacologist David Jack was working for Allen & Hanbury's when Glaxo took it over; he went on to lead the company's R&D until 1987. After the company bought Meyer Laboratories in 1978, it began 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 & Company was founded in 1880 in London by the American pharmacists Henry Wellcome and Silas Burroughs. The Wellcome Tropical Research Laboratories opened in 1902. In the 1920s Burroughs Wellcome established research and manufacturing facilities in Tuckahoe, New York, which served as the US headquarters until the company moved to Research Triangle Park in North Carolina in 1971. The Nobel Prize winning scientists Gertrude B. Elion and George H. Hitchings worked there and invented drugs still used many years later, such as mercaptopurine. In 1959 the Wellcome Company bought Cooper, McDougall & Robertson Inc to become more active in animal health. Glaxo and Burroughs Wellcome merged in 1995 to form Glaxo Wellcome. Glaxo restructured its R&D operation that year, cutting 10,000 jobs worldwide, closing its R&D facility in Beckenham, Kent, and opening a Medicines Research Centre in Stevenage, Hertfordshire. Also that year, Glaxo Wellcome acquired the California-based Affymax, a leader in the field of combinatorial chemistry.

By 1999 Glaxo Wellcome had become the world's third-largest pharmaceutical company by revenues (behind Novartis and Merck), with a global market share of around 4 per cent. Its products included Imigran (for the treatment of migraine), salbutamol (Ventolin) (for the treatment of asthma), Zovirax (for the treatment of coldsores), and Retrovir and Epivir (for the treatment of AIDS). In 1999 the company was the world's largest manufacturer of drugs for the treatment of asthma and HIV/AIDS. It employed 59,000 people, including 13,400 in the UK, had 76 operating companies and 50 manufacturing facilities worldwide, and seven of its products were among the world's top 50 best-selling pharmaceuticals. The company had R&D facilities in Hertfordshire, Kent and London, and manufacturing plants in Scotland and the north of England. It had R&D centres in the US and Japan, and production facilities in the US, Europe and the Far East.

SmithKline Beecham

In 1843 Thomas Beecham launched his Beecham's Pills laxative in England, giving birth to the Beecham Group. In 1859 Beecham opened its first factory in St Helens, Lancashire. By the 1960s Beecham was extensively involved in pharmaceuticals.

John K. Smith opened his first pharmacy in Philadelphia in 1830. In 1865 Mahlon Kline joined the business, which 10 years later became Smith, Kline & Co. In 1891 it merged with French, Richard and Company, and in 1929 changed its name to Smith Kline & French Laboratories as it focused more on research. Years later it bought Norden Laboratories, a business doing research into animal health, and Recherche et Industrie Thérapeutiques in Belgium in 1963 to focus on vaccines. The company began to expand globally, buying seven laboratories in Canada and the United States in 1969. In 1982 it bought Allergan, a manufacturer of eye and skincare products.

SmithKline & French merged with Beckman Inc. in 1982 and changed its name to SmithKline Beckman. In 1988 it bought its biggest competitor, International Clinical Laboratories, and in 1989 merged with Beecham to form SmithKline Beecham plc. The headquarters moved from the United States to England. To expand R&D in the United States, the company bought a new research center in 1995; another opened in 1997 in England at New Frontiers Science Park, Harlow.

GlaxoSmithKline

Glaxo Wellcome and SmithKline Beecham announced their intention to merge in January 2000. The merger was completed in December that year, forming GlaxoSmithKline (GSK). The company's global headquarters are at GSK House, Brentford, London, officially opened in 2002 by then-Prime Minister Tony Blair. The building was erected at a cost of £300 million and as of 2002 was home to 3,000 administrative staff. Andrew Witty took over as CEO in May 2008. Witty joined Glaxo in 1985 and had been president of GSK's Pharmaceuticals Europe since 2003. Chris Gent, previously CEO of Vodafone, was the chair between 2005 and 2015. On 20 September 2016 the company announced that his successor, a management professional originally from Lancashire, with a background in marketing, Emma Walmsley, would take over the position on Witty's retirement, scheduled for 31 March 2017. Philip Hampton, at that time chair of the Royal Bank of Scotland, replaced Gent as GSK chairman in September 2015.

Venture arms

SR One was established in 1985 by SmithKline Beecham to invest in new biotechnology companies and continued operating after GSK was formed; by 2003 GSK had formed another subsidiary, GSK Ventures, to out-license or start new companies around drug candidates that it did not intend to develop further. As of 2003, SR One tended to invest only if the company aligned with GSK's business.

SR One was led by:

Pharmaceuticals

GSK manufactures products for major disease areas such as asthma, cancer, infections, diabetes and mental health. Its biggest-selling in 2013 were Advair, Avodart, Flovent, Augmentin, Lovaza, and Lamictal; its drugs and vaccines earned £21.3 billion that year. Other top-selling products include its asthma/COPD inhalers Advair, Ventolin, and Flovent; its diphtheria/tetanus/pertussis vaccine Infanrix and its hepatitis B vaccine; the epilepsy drug Lamictal, and the antibacterial Augmentin.

Medicines historically discovered or developed at GSK and its legacy companies and now sold as generics include amoxicillin and amoxicillin-clavulanate, ticarcillin-clavulanate, mupirocin, and ceftazidime for bacterial infections, zidovudine for HIV infection, valacyclovir for herpes virus infections, albendazole for parasitic infections, sumatriptan for migraine, lamotrigine for epilepsy, bupropion and paroxetine for major depressive disorder, cimetidine and ranitidine for gastroesophageal reflux disorder, mercaptopurine and thioguanine for the treatment of leukemia, allopurinol for gout, pyrimethamine for malaria, and the antibacterial trimethoprim.

Among these, albendazole, amoxicillin, amoxicillin-clavulanate, allopurinol, mercaptopurine, mupriocin, pyrimethamine, ranitidine, thioguanine, trimethoprim and zidovudine are listed on the World Health Organization's list of essential medications.

Malaria vaccine

In 2014 GSK applied for regulatory approval for the first malaria vaccine. Malaria is responsible for over 650,000 deaths annually, mainly in Africa. Known as RTS,S, the vaccine was developed as a joint project with the PATH vaccines initiative and the Bill and Melinda Gates Foundation. The company has committed to making the vaccine available in developing countries for five percent above the cost of production.

As of 2013 RTS,S, which uses GSK's proprietary AS01 adjuvant, was being examined in a Phase 3 trial in eight African countries. PATH reported that "[i]n the 12-month period following vaccination, RTS,S conferred approximately 50% protection from clinical Plasmodium falciparum disease in children aged 5-17 months, and approximately 30% protection in children aged 6-12 weeks when administered in conjunction with Expanded Program for Immunization (EPI) vaccines." In 2014 Glaxo said it had spent more than $350 million and expected to spend an additional $260 million before seeking regulatory approval. A second generation malaria vaccine is being evaluated in Phase 2 clinical trials.

Consumer healthcare

GSK's consumer healthcare division, which earned £5.2 billion in 2013, sells oral healthcare, including Aquafresh, Maclean's and Sensodyne toothpastes; and drinks such as Horlicks, Boost, a chocolate-flavoured malt drink sold in India, and formerly Lucozade and Ribena, sold in 2013 to Suntory for £1.35bn. Other products include Abreva to treat cold sores; Night Nurse, a cold remedy; Breathe Right nasal strips; and Nicoderm and Nicorette nicotine replacements. In March 2014 it recalled Alli, an over-the-counter weight-loss drug, in the United States and Puerto Rico because of possible tampering, following customer complaints.

Facilities

As of 2013 GSK had offices in over 115 countries and employed over 99,000 people, 12,500 in R&D. The company's single largest market is the United States. Its US headquarters are in The Navy Yard, Philadelphia, and Research Triangle Park, North Carolina; its consumer-products division is in Moon Township, Pennsylvania. Company facilities include:

Scientific recognition

Four GlaxoSmithKline scientists have been recognized by the Nobel Committee for their contributions to basic medical science and/or therapeutics development.

2001–2010

GSK completed the acquisition of New Jersey-based Block Drug in 2001 for US$1.24 billion. In 2006 GSK acquired the US-based consumer healthcare company CNS Inc., whose products included Breathe Right nasal strips and FiberChoice dietary supplements, for US$566 million in cash. GSK opened its first R&D centre in China in 2007, in Shanghai, initially focused on neurodegenerative diseases.

In 2009 GSK acquired Stiefel Laboratories, then the world's largest independent dermatology drug company, for US$3.6bn. In November the FDA approved GSK's vaccine for 2009 H1N1 influenza protection, manufactured by the company's ID Biomedical Corp in Canada. Also in November 2009 GSK formed a joint venture with Pfizer to create ViiV Healthcare, which specializes in HIV research. In 2010 the company acquired Laboratorios Phoenix, an Argentine pharmaceutical company, for US$253m, and the UK-based sports nutrition company Maxinutrition for £162 million (US$256 million).

2011–present

In 2011, in a $660-million deal, Prestige Brands Holdings took over 17 GSK brands with sales of $210 million, including BC Powder, Beano, Ecotrin, Fiber Choice, Goody's Powder, Sominex and Tagamet. In 2012 the company announced that it would invest £500 million in manufacturing facilities in Ulverston, northern England, designating it as the site for a previously announced biotech plant. In May that year it acquired CellZome, a German biotech company, for US$98 million, and in June worldwide rights to alitretinoin (Toctino), an eczema drug, for $302 million. In 2013 GSK acquired Human Genome Sciences (HGS) for $3 billion; the companies had collaborated on developing the lupus drug Belimumab (Benlysta), albiglutide for type 2 diabetes, and darapladib for atherosclerosis.

In March 2014 GSK paid $1 billion to raise its stake in its Indian pharmaceutical unit, GlaxoSmithKline Pharmaceuticals, to 75 percent as part of a move to focus on emerging markets. In April 2014 Novartis and Glaxo agreed on more than $20 billion in deals, with Novartis selling its vaccine business to GSK and buying GSK's cancer business. In February 2015 GSK announced that it would acquire GlycoVaxyn, a Swiss pharmaceutical company, for $190 million, and in June that year that it would sell two meningitis drugs to Pfizer, Nimenrix and Mencevax for around $130 million.

Philanthropy and social responsibility

Since 2010 GlaxoSmithKline has several times ranked first among pharmaceutical companies on the Global Access to Medicines Index, which is funded by the Bill and Melinda Gates Foundation. In 2014 the Human Rights Campaign, an LGBT-rights advocacy group gave GSK a score of 100 percent in its Corporate Equality Index.

GSK has been active, with the World Health Organization (WHO), in the Global Alliance to Eliminate Lymphatic Filariasis (GAELF). Around 120 million people globally are believed to be infected with lymphatic filariasis. In 2012 the company endorsed the London Declaration on Neglected Tropical Diseases; it agreed to donate 400 million albendazole tablets to the WHO each year to fight soil-transmitted helminthiasis and to provide 600 million albendazole tablets every year for lymphatic filariasis until the disease is eradicated. As of 2014 over 5 billion treatments had been delivered, and 18 of 73 countries in which the disease is considered endemic had progressed to the surveillance stage.

In 2009 the company said it would cut drug prices by 25 percent 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 percent of profits from the least-developed countries in medical infrastructure for those countries. Médecins Sans Frontières welcomed the decision, but criticized GSK for failing to include HIV patents in its patent pool and for not including middle-income countries in the initiative.

In 2013 GSK licensed its HIV portfolio to the Medicines Patent Pool for use in children, and agreed to negotiate a license for dolutegravir, an integrase inhibitor then in clinical development. In 2014 this license was extended to include dolutegravir and adults with HIV. The licenses include countries in which 93 percent of adults and 99 percent of children with HIV live. Also in 2013 GSK joined AllTrials, a British campaign to ensure that all clinical trials are registered and the results reported. The company said it would make its past clinical-trial reports available and future ones within a year of the studies' end.

Overview

In July 2012 GSK pleaded guilty in the United States to criminal charges, and agreed to pay $3 billion, in what was the largest settlement until then between the Justice Department and a drug company. The $3 billion included a criminal fine of $956,814,400 and forfeiture of $43,185,600. The remaining $2 billion covered a civil settlement with the government under the False Claims Act. The investigation was launched largely on the basis of information from four whistleblowers who filed qui tam (whistleblower) lawsuits against the company under the False Claims Act.

The charges stemmed from GSK's promotion of the anti-depressants Paxil (paroxetine) and Wellbutrin (bupropion) for unapproved uses from 1998–2003, specifically as suitable for patients under the age of 18, and from its failure to report safety data about Avandia (rosiglitazone), both in violation of the Federal Food, Drug, and Cosmetic Act. Other drugs promoted for unapproved uses were two inhalers, Advair (fluticasone/salmeterol) and Flovent (fluticasone propionate), as well as Zofran (ondansetron), Imitrex (sumatriptan), Lotronex (alosetron) and Valtrex (valaciclovir).

The settlement also covered reporting false best prices and underpaying rebates owed under the Medicaid Drug Rebate Program, and kickbacks to physicians to prescribe GSK's drugs. There were all-expenses-paid spa treatments and hunting trips for doctors and their spouses, speakers' fees at conferences, and payment for articles ghostwritten by the company and placed by physicians in medical journals. The company set up a ghostwriting programme called CASPPER, initially to produce articles about Paxil but which was extended to cover Avandia.

As part of the settlement GSK signed a five-year Corporate Integrity Agreement with the Department of Health and Human Services, which obliged the company to make major changes in the way it did business, including changing its compensation programmes for its sales force and executives, and to implement and maintain transparency in its research practices and publication policies. It announced in 2013 that it would no longer pay doctors to promote its drugs or attend medical conferences, and that its sales staff would no longer have prescription targets.

Rosiglitazone (Avandia)

The 2012 settlement included a criminal fine of $242,612,800 for failing to report safety data to the FDA about Avandia (rosiglitazone), a diabetes drug approved in 1999, and a civil settlement of $657 million for making false claims about it. The Justice Department said GSK had promoted rosiglitazone to physicians with misleading information, including that it conferred cardiovascular benefits despite an FDA-mandated label warning of cardiovascular risks.

In 1999 John Buse, a diabetes specialist, told medical conferences that rosiglitazone might carry an increased risk of cardiovascular problems. GSK threatened to sue him, called his university head of department, and persuaded him to sign a retraction. GSK raised questions internally about the drug's safety in 2000, and in 2002 the company ghostwrote an article in Circulation describing a GSK-funded clinical trial that suggested rosiglitazone might have a beneficial effect on cardiovascular risk. From 2001 reports began to link the thiazolidinediones (the class of drugs to which rosiglitazone belongs) to heart failure. In April that year GSK began a six-year, open-label, randomized trial, known as RECORD, to examine rosiglitazone and cardiovascular events. Two GSK meta-analyses in 2005 and 2006 showed an increased risk of cardiovascular problems with rosiglitazone; the information was passed to the FDA and posted on the company website, but not otherwise published. By December 2006 rosiglitazone had become the top-selling diabetes drug, with annual sales of US$3.3 billion.

In June 2007 the New England Journal of Medicine published a meta-analysis that associated the drug with an increased risk of heart attack. GSK had reportedly tried to persuade one of the authors, Steven Nissen, not to publish it, after receiving an advance copy from one of the journal's peer reviewers, a GSK consultant. In July 2007 FDA scientists suggested that rosiglitazone had caused 83,000 excess heart attacks between 1999 and 2007. The FDA placed restrictions on the drug, including adding a boxed warning, but did not withdraw it. (In 2013 the FDA rejected that the drug had caused excess heart attacks.) A Senate Finance Committee inquiry concluded in 2010 that GSK had sought to intimidate scientists who had concerns about rosiglitazone. In February that year the company tried to halt publication of an editorial about the controversy by Nissen in the European Heart Journal.

The results of GSK's RECORD trial were published in June 2009. It confirmed an association between rosiglitazone and an increased risk of heart failure and fractures, but not of heart attack, and concluded that it "does not increase the risk of overall cardiovascular morbidity or mortality compared with standard glucose-lowering drugs." Steven Nissan and Kathy Wolkski argued that the study's low event rates reduced its statistical power. In September 2009 rosiglitazone was suspended in Europe. The results of the RECORD study were confirmed in 2013 by the Duke Clinical Research Institute, in an independent review required by the FDA. In November that year the FDA lifted the restrictions it had placed on the drug. The boxed warning about heart attack was removed; the warning about heart failure remained in place.

Paroxetine (Paxil/Seroxat)

GSK was fined for promoting Paxil/Seroxat (paroxetine) for treating depression in the under-18s, although the drug had not been approved for pediatric use. Paxil had $4.97 billion worldwide sales in 2003. The company conducted nine clinical trials between 1994 and 2002, none of which showed that Paxil helped children with depression. From 1998 to 2003 it promoted the drug for the under-18s, paying physicians to go on all-expenses paid trips, five-star hotels and spas. From 2004 Paxil's label, along with those of similar drugs, included an FDA-mandated boxed warning that it might increase the risk of suicidal ideation and behaviour in patients under 18.

An internal SmithKline Beecham document said in 1998, about withheld data from two GSK studies: "It would be commercially unacceptable to include a statement that [pediatric] efficacy had not been demonstrated, as this would undermine the profile of paroxetine." The company ghostwrote an article, published in 2001 in the Journal of the American Academy of Child and Adolescent Psychiatry, that misreported the results of one of its clinical trials, Study 329. The article concluded that Paxil was "generally well tolerated and effective for major depression in adolescents." The suppression of the research findings is the subject of Side Effects (2008) by Alison Bass.

For 10 years GSK marketed Paxil as non-habit forming. In 2001 35 patients filed a class-action suit alleging they had suffered withdrawal symptoms, and in 2002, a Los Angeles court issued an injunction preventing GSK from advertising that the drug was not habit forming. The court withdrew the injunction after the FDA objected that the court had no jurisdiction over drug marketing that the FDA had approved. In 2003, a World Health Organization committee reported that Paxil was among the top 30 drugs, and top three antidepressants, for which dependence had been reported.

Bupropion (Wellbutrin)

The company was also fined for promoting Wellbutrin (bupropion) – approved at the time for major depressive disorder and also sold as a smoking-cessation aid, Zyban – for weight loss and the treatment of attention deficit hyperactivity disorder, sexual dysfunction and substance addiction. GSK paid doctors to promote these off-label uses, and set up supposedly independent advisory boards and Continuing Medical Education programmes.

Antitrust case over griseofulvin

In the 1960s Glaxo Group Ltd. (Glaxo) and Imperial Chemical Industries (ICI) each owned patents covering various aspects of the antifungal drug griseofulvin. They created a patent pool by cross-licensing their patents, subject to express licensing restrictions that the chemical from which the "finished" form of the drug (tablets and capsules) was made must not be resold in bulk form, and they licensed other drug companies to sell the drug in finished form and subject to similar restrictions. The effect and intent of the bulk-sale restriction was to keep the drug chemical out of the hands of small companies that might act as price-cutters, and the effect was to maintain stable, uniform prices.

The United States brought an antitrust suit against the two companies—United States v. Glaxo Group Ltd.—charging them with violation of the Sherman Act and also seeking to have the patents declared invalid. The trial court found that the defendants had engaged in several unlawful conspiracies, but dismissed the part of the suit seeking invalidation of patents and refused to grant as relief mandatory sales of the bulk drug chemical and compulsory licensing of the patents. The government appealed to the Supreme Court, which reversed, in United States v. Glaxo Group Ltd., 410 U.S. 52 (1973).

Ribena

There were concerns in the 2000s about the sugar and vitamin content of Ribena, a blackcurrant-based syrup and soft drink owned by GSK until 2013. Produced in England by H.W. Carter & Co from the 1930s, the company's unbranded syrup was distributed to children as a source of vitamin C during World War II, which gave the drink a reputation as good for health. Beecham bought H. W. Carter in 1955.

In 2001 the British Advertising Standards Authority (ASA) required GSK to withdraw its claim that Ribena Toothkind, a lower-sugar variety, did not encourage tooth decay. A company poster showed bottles of Toothkind in place of the bristles on a toothbrush. The ASA's ruling was upheld by the High Court. In 2007 GSK was fined $217,000 in New Zealand over its claim that ready-to-drink Ribena contained high levels of vitamin C, after it was found to contain no detectable vitamin C. In 2013 GSK sold Ribena and another drink, Lucozade, to the Japanese multinational Suntory for £1.35 billion.

SB Pharmco Puerto Rico

In 2010 the US Department of Justice announced that GSK would pay a $150 million criminal fine and forfeiture, and a civil settlement of $600 million under the False Claims Act. The fines stemmed from production of improperly made and adulterated drugs from 2001 to 2005 at GSK's subsidiary, SB Pharmco Puerto Rico Inc., in Cidra, Puerto Rico, which at the time produced $5.5 billion of products each year. The drugs involved were Kytril, an antiemetic; Bactroban, used to treat skin infections; Paxil, the anti-depressant; and Avandamet, a diabetes drug. GSK closed the factory in 2009.

According to the New York Times, the case began in 2002 when GSK sent experts to fix problems cited by the FDA. The lead inspector recommended recalls of defective products, but they were not authorized; she was fired in 2003 and filed a whistleblower lawsuit. In 2005 federal marshals seized $2 billion worth of products, the largest such seizure in history. In the 2010 settlement SB Pharmco pleaded guilty to criminal charges, and agreed to pay $150 million in a criminal fine and forfeiture, at that time the largest such payment ever by a manufacturer of adulterated drugs, and $600 million in civil penalties to settle the civil lawsuit.

China

In 2013 Chinese authorities announced that, since 2007, GSK had funnelled HK$3.8 billion in kickbacks to GSK managers, doctors, hospitals and others who prescribed their drugs, using over 700 travel agencies and consulting firms. Chinese authorities arrested four GSK executives as part of a four-month investigation into claims that doctors were bribed with cash and sexual favours. In 2014 a Chinese court found the company guilty of bribery and imposed a fine of $490 million. Mark Reilly, the British head of GSK's Chinese operations, received a three-year suspended prison sentence after a one-day trial held in secret. Reilly was reportedly deported from China and dismissed by the company.

Market manipulation in the UK

In February 2016 the company was fined more than £37 million by the Competition and Markets Authority for paying Generics UK, Alpharma and Norton Healthcare more than £50m between 2001 and 2004, in order to keep generic varieties of Paroxetine out of the NHS market. The generics companies were fined a further £8 million. At the end of 2003 when generics were available in the UK the price of Paroxetine dropped 70%.

Miscellaneous

Italian police sought bribery charges in May 2004 against 4,400 doctors and 273 GSK employees. GSK and its predecessor were accused of having spent £152m on physicians, pharmacists and others, giving them cameras, computers, holidays and cash. Doctors were alleged to have received cash based on the number of patients they treated with a cancer drug, topotecan (Hycamtin). The following month prosecutors in Munich accused 70–100 doctors of having accepted bribes from SmithKline Beecham between 1997 and 1999. The inquiry was opened over allegations that the company had given over 4,000 hospital doctors money and free trips. All charges were dismissed by the Verona court in January 2009.

In 2006 in the United States GSK settled the largest tax dispute in IRS history, agreeing to pay $3.1 billion. At issue were Zantac and other products sold in 1989–2005. The case revolved around intracompany transfer pricing—determining the share of profit attributable to the US subsidiaries of GSK and subject to tax by the IRS.

The UK's Serious Fraud Office (SFO) opened a criminal inquiry in 2014 into GSK's sales practices, using powers granted by the Bribery Act 2010. The SFO said it was collaborating with Chinese authorities to investigate bringing charges in the UK related to GSK's activities in China, Europe and the Middle East. Also as of 2014 the US Department of Justice was investigating GSK with reference to the Foreign Corrupt Practices Act.

Diagram of acquisition history

The following is an illustration of the company's major mergers and acquisitions and historical predecessors (this is not a comprehensive list):