Glaxo signs drug-development deal with British firm

GlaxoSmithKline P.L.C. signed a deal yesterday to develop drugs to treat rheumatoid arthritis and other inflammatory diseases.

The agreement to work with Chroma Therapeutics Ltd. of Oxford, England, to develop new products represents Glaxo's latest effort to overhaul its research and development programs so it more closely resembles a small, nimble biotechnology company rather than a lumbering pharmaceutical giant.

Glaxo is based in London but has large operations in the Philadelphia area.

When Andrew Witty became chief executive of GlaxoSmithKline about a year ago, he said he would make strategic investments in small companies to ensure that his company had a steady supply of drugs in development.

While it will take years to see whether those investments pay off, Witty has so far made good on his promise to start making them.

In the rheumatoid arthritis area alone in the last year, Glaxo has announced partnerships with four small companies.

"There is a lot of unmet need in the inflammation area, with rheumatoid arthritis being one of the biggest areas of need," said Shelagh Wilson, vice president of Glaxo's European Centers for Excellence in External Drug Discovery.

Chroma is developing compounds that target macrophages, a type of large white blood cell that plays a key role in the immune system. The drugs' targeting is so refined that they dramatically reduce the chance of side effects, Wilson said.

Glaxo gave Chroma an up-front payment and invested in the company, but amounts were not disclosed.

The drugs will take several years to develop and, because drug development is so risky, may not make it to market at all. But if the company succeeds with all four products, Glaxo will pay Chroma more than $1 billion.