Updated on 6 March 2015
Pharma giant GlaxoSmithKline (GSK) is reportedly shutting its neural pathways discovery performance unit at Biopolis, Singapore in a bid to cut down the operation cost and save dollars, in line with its global revamp strategies. Mr Andrew Witty, CEO informed company's shareholders earlier this year that cost control efficiencies are being implemented through restructuring initiatives.
In 2013, GSK wrapped up the manufacturing facility of its acquired skincare firm, Stiefel Laboratories, based in Singapore citing its under-utilized capacity and axed around 100 associated staff.
Singapore gives various attractive financial incentives to investors and a foreign investor could be offered a tax exemption period of five to 10 years for capital equipment since its establishment. With an investment of $62 million, GSK opened the research facility in Singapore in 2007 for expediting drug discovery for neurodegenerative disorders. The research centre is peddling towards taxable bracket and the company might have thought that it is right time to exit.
2014 was not really a good year for GSK following the allegations the company faced in China. GSK revenue fell from $40.4 billion in 2013 to $35.1billion in 2014 and the operating income fell from $11.2 billion to $8 billion. The company's turnover fell by three percent and growth in US and Europe market remained mostly flat.
It is reported that GSK is also planning to eliminate around 900 people from its US operation and R&D model is being reshuffled. The giant firm slashed the expense on research and development from $5.4 billion in 2013 to $4.9 billion in 2014.