LONDON - GlaxoSmithKline's chief executive acknowledged on Friday that overhauling its drug discovery machine had been traumatic but said turning back the clock on R&D was now delivering results.

It's been a major upheaval and I'd be the first to admit that a year ago morale in our discovery organisation was not very good, in fact it was terrible, Andrew Witty told a healthcare conference.

Witty took over as head of the world's second-largest drugmaker in May 2008 with a promise to create much smaller scientific teams and to move away from industrial-scale drug discovery processes.

The upheaval involved job losses in the company's core research and development (R&D) organisation, angering some staff.

Many of the people we had in the discovery organisation left in the period of change, either through their own volition or because they were not up to operating in the kind of way I have described, Witty said.

Today, a year or so later, I'm shocked at how fast this has bedded down.

Glaxo is now synthesising more molecules against more disease targets than ever before and there are qualitative signs of improvement, with teams taking a more lateral approach to problem solving.

It has been a radical shift.

We've really thrown into reverse much of the trend of research organisation that had developed over the last 15 years, Witty said.

Over that time, the drugs industry was a big commercial success but it took a wrong turn by deciding that drug discovery was an industrial process based on large-scale application of technologies like genomics, proteomics and combinatorial chemistry.

These were all supposed to transform productivity yet none of them did. It turns out, in my view, that research is much more of an art than a science, Witty said.

Pharmaceutical companies around the world are struggling to find a new business model as blockbuster drugs brought to market in the 1990s face patent expiry at a time when new ones prove harder and harder to develop.

On top of that they are having to adapt to a period of austerity and healthcare reform in major markets -- most notably the United States -- which Witty reiterated would require a much more flexible approach to drug pricing. (Editing by Andrew Macdonald)

Glaxosmithkline