Absent From Cancer Drugs, Glaxo Signals a Revival With New Hire
(Bloomberg) -- GlaxoSmithKline Plc sold its portfolio of cancer therapies almost three years ago. The drug giant’s new head of research and development looks set to rebuild.
Hal Barron, who takes over in January, spent 17 years at San Francisco-based biotech firm Genentech and its parent Roche Holding AG, leading the development of a string of blockbuster tumor treatments that are projected to generate almost $14 billion in combined sales this year for the world’s biggest maker of cancer drugs.
Now Barron will define Glaxo’s ambitions in cancer and tap new technologies to develop breakthrough drugs. A doctor with deep Silicon Valley connections, he will be critical in pushing forward Chief Executive Officer Emma Walmsley’s agenda of shaking up the labs at the U.K.’s largest drugmaker, which is seen as a laggard in delivering cutting-edge medicines.
“This is an opportunity for them to get back into oncology,” Mondher Mahjoubi, a former Roche executive who worked with Barron at the Swiss behemoth, said in an interview. “Hal is someone who can make a difference.”
Barron, who declined to be interviewed, starts at a crucial juncture for Glaxo: the drugmaker this year ranked No. 11 among 13 large pharma companies in a Bloomberg Intelligence analysis measuring R&D returns. The stock has also tumbled 16 percent so far in 2017 as investors grew concerned about the company’s ability to rejuvenate the pipeline of medicines and fund its dividend.
Hiring Barron is the latest demonstration of Walmsley’s focus on changing that perception since she took the helm in April. A key area has been revamping the management team as she brings in new talent from diverse backgrounds tasked with making Glaxo more competitive.
For instance, Walmsley poached Luke Miels from closest rival AstraZeneca Plc, an audacious move that triggered an employment dispute but eventually led to him taking over as the new pharma head in September. She also turned to Karenann Terrell, a former executive at retailer Wal-Mart Stores Inc., to fill the newly created role of digital and technology chief.
As Glaxo’s top scientist, Barron will help prepare for the “next wave of growth” and use technology to make the company more efficient, according to Walmsley. His priorities, she said in an interview, will be “the pipeline, the pipeline and the pipeline.”
That’s familiar territory for Barron. Before being lured away in 2013 by Calico, a California company funded by Google’s parent and led by Apple Inc. Chairman Arthur Levinson, he had overseen the development of lucrative drugs like Avastin for cancer and Lucentis for eye disease at Roche.
Miels, who worked with Barron at the Swiss company, said in an interview that the two will look to move faster in developing new medicines. In cancer, instead of trying to compete with established rivals, Glaxo will pursue targets that are “off to the side” and seek to combine its treatments with other immune therapies, he said.
Under Walmsley’s predecessor, Glaxo sold its oncology drugs to Novartis in 2015 for as much as $16 billion as part of a broader asset swap, yet held on to its pipeline of early-stage therapies. One of its key projects is an experimental treatment targeting a protein called BCMA, which has won pledges for expedited reviews by both U.S. and European regulators.
Barron’s “experience in this area will be very useful to try to pick those opportunities that maybe others haven’t thought of, or others have passed by, where we can spot value,” said Miels, who aims to align the commercial and research sides of the drugs business.
Even as a young doctor in training at the University of California, San Francisco, in the 1990s, Barron displayed the driven, skeptical nature that would later make him a standout in the drug industry, said Warren Browner, who was on the faculty at the time.
“Hal was unusual,” Browner said. “You couldn’t just tell him, ‘Give the patient this antibiotic.’ He’d want to know why this one? What’s the evidence? How did you make that determination? How do we even know the patient has this disease?”
Cancer will only be one part of his bailiwick. Walmsley in July unveiled plans to focus on treatments in respiratory conditions, HIV and infectious diseases and immuno-inflammatory disorders, while terminating or divesting more than 30 drug-development programs. The company has also signaled that it may consider a sale of its rare diseases unit.
Investors are betting that Barron will also boost Glaxo’s ties to the California tech sector and draw skilled researchers. The drugmaker plans to look for business opportunities in research and development from a new office in San Francisco, and Barron himself will be based in the U.S.
“He’s a magnet for talent,” said Rudi Van Den Eynde, a Glaxo shareholder and pharmaceutical and biotech specialist at Candriam Investors Group. “He could attract a lot of people very quickly.”
Glaxo may also pursue acquisitions to gain depth in oncology, though it faces some tough financial choices, Van Den Eynde said.
Since joining Genentech as a clinical scientist in 1996, Barron has been fascinated with how companies evaluate potential medicines and why so many promising ones ultimately fail, according to Browner, who keeps in touch with the new Glaxo executive and is now CEO of California Pacific Medical Center.
Now Barron’s skills will be put to the test again.
“The opportunity that came along to influence the direction of a big company like Glaxo is right in his wheelhouse,” Browner said.
©2017 Bloomberg L.P.