Monday, April 30, 2007

GSK: Seeding More CEDDs?

First there were CEDDs, then a CEEDD, and now, apparently, something in between the two. Confused? So are we.

Let's re-cap: In 2001, GlaxoSmithKline created a series of small, therapeutic area-focused R&D units known as Centers of Excellence for Drug Discovery (CEDDs). The idea was to improve R&D productivity. Four years on, realizing, along with the rest of the industry, that this would be tricky without outside help, GSK expanded the CEDD model to embrace external dealmaking, too. The Center of Excellence for External Drug Discovery (CEEDD) was born, with its own management, no in-house R&D, no particular TA focus but a brief to build broad-based, risk-sharing deals.

The concept seems to have caught on-- a good handful of Big Pharma, including AstraZeneca, Roche and Pfizer have since built their own flavor of biotech-like units, albeit (thankfully) with different labels.

So GSK is right to be proud (even though it's still a little early to judge ultimate output, notwithstanding impressive NCE numbers). But now, The IN VIVO Blog has learnt, the company is trying to stretch the model one more step further.

The idea, according to senior sources, is to create a sort of hybrid CEDD and CEEDD, with both internal and external R&D programs. Each hybrid unit (let's avoid more acronyms) will have about 100 staff (more than the CEEDD, but only about a third the size of a CEDD) but will have to build a CEDD-sized portfolio, in part through doing outside deals. Unlike the CEEDD, though, these hybrids will be TA-specific.

Should I say are TA-specific: the first hybrid is already up and running. Missed it? At the end of March 2007, GSK quietly announced a "newly organised research unit" dedicated to infectious diseases. The Infectious Diseases Center of Excellence for Drug Discovery, or ID CEDD (ouch) "will focus on building an innovative pipeline through both internal efforts and extensive alliances with other companies and research institutions," says GSK.

Hmm. So does this mean the CEEDD hasn't been doing its job properly? Apparently not--it has after all signed a series of broad-ranging deals, as planned, including with Chemocentryx and Epix. But sources fear the new structure will be a step backwards. Biotechs won't like competing directly with in-house programs, particularly when internal and external projects are managed by the same (likely strong-minded) team. That was, after all, why the CEEDD was created—with a (theoretically) independent management that didn’t have to listen to TA-heads if it didn’t want to.

Thus the new CEDD installation may be in danger of diluting the benefits of the last one. The danger is messages get mixed and everyone--including GSK's potential and existing partners--just wind up confused.

Don’t be too clever, GSK.

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