Meanwhile, AstraZeneca is expected to report a 10% rise in revenues to almost $7bn and a 41% increase in core earnings per share to $1.48 on Friday, with strong sales of cancer drugs Tagrisso, Imfinzi and Lynparza, and the diabetes treatment Farxiga. Some say that she has the right skills, is surrounded by top scientists, and should be given more time to replenish the meagre drug pipeline she inherited. While shareholders are disappointed by the company’s poor share performance – down almost a fifth since Walmsley became chief executive four years ago – there seems to be broad support for the strategy. Some have also clamoured for a flotation of the consumer health business to raise further funds, rather than a spin-off, but plans are far advanced now. She wants to run the biopharma company, but some investors appear to question her non-scientific background and would reportedly prefer her to head the consumer health business, which she led before her elevation to chief executive. She is likely to face questions about who will lead the two new businesses after the split. It is in a similar position to where AstraZeneca was a few years ago, before its chief executive, Pascal Soriot, set about rebuilding its drugs portfolio and made smart research bets, particularly on cancer treatments.Įlliott’s investment piles more pressure on Walmsley to get the revamp right – and to come up with new blockbuster drugs.
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The latter will be created from the HIV, vaccines and pharma divisions.Īnalysts say the key part is the creation of a single biopharma business focused on developing new medicines and vaccines from biological and chemical sources, because here GSK’s pipeline lags behind rivals after a series of setbacks in the past year. Next year, GSK – a household name whose products range from Sensodyne toothpaste and Panadol painkillers to HIV treatments and the Shingrix shingles vaccine – will be split into a consumer healthcare and a pharmaceuticals business.
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“Elliott may be seeking management change, but thus far it would seem management has the full support of the board.” This reflects tougher year-on-year comparisons (due to stockpiling of many products at the start of the pandemic), as well as rising research and development costs.Įlliott is a prominent activist investor that has successfully campaigned for change at companies such as SoftBank, and is infamous for its 15-year battle with Argentina over government debt payments, but it is unclear what its intentions are this time, as GSK is about to be broken up anyway under a radical revamp thought up by Walmsley.Ī sale of the business also looks unlikely, as “the UK government would be highly unlikely to allow a foreign company to take over GSK, and that would really be the only feasible option, given the company’s size,” says Barclays analyst Emily Field. Analysts are forecasting a 14% drop in revenues to £7.8bn and a 10% decline in pre-tax profit to £1.7bn in what looks to be the weakest quarter of the year.
GSK’s chief executive, Emma Walmsley, will face questions over the future of the business, as well as its performance, when she unveils first-quarter results on Wednesday, followed by the annual meeting a week later. When the American hedge fund Elliott Management took a sizeable stake in GlaxoSmithKline this month, the drugmaker’s shares jumped 5% on speculation of a possible shake-up at the company.
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