GSK's Walmsley battles hostile investors, Covid slump

·3-min read

The head of the British pharmaceutical giant GSK, Emma Walmsley, unveiled Wednesday mixed quarterly results as criticism mounts over ineffective management and delays in Covid-19 vaccine production.

Revenue grew six percent to £8.1 billion ($11.2 billion, 9.5 billion euros) in the three months to June 30 compared with the second quarter last year, according to an earnings statement.

Net profit though slumped more than a third to £1.4 billion after GlaxoSmithKline had benefitted from an exceptional gain one year earlier.

GSK is hoping to launch a Covid-19 jab, developed with France's Sanofi, at the end of 2021, trailing in the wake of Anglo-Swedish firm AstraZeneca, which was an early mover in the market despite having little prior experience in vaccine development.

As Glaxo faces Covid-19 headwinds, Walmsley is seeking to reshape it with the creation of a "new GSK", separate from its over-the-counter and drugstore business.

"We continue to strengthen our (drugs) pipeline and are advancing well towards separation," Walmsley said Wednesday.

GSK will refocus on infectious diseases, oncology and respiratory diseases, promising its shareholders increased sales and profitability under the plans.

As the coronavirus has become a priority over other health concerns, the company has seen lower sales for other treatments including antibiotics and vaccines, like Shingrix for shingles.

Walmsley is one of a small number of women to lead a large UK company and has become a fixture of global business circles after boosting GSK's research efforts.

The 52-year-old Briton was appointed to the helm of the pharmaceutical heavyweight in 2017 and has navigated it through the storm of the global pandemic, during which time it has fallen behind in the development of a vaccine.

Walmsley's remuneration was cut for 2020, to £7.0 million from £8.1 million in 2019.

As GSK tries to put the struggles of the pandemic behind it and deliver Walmsley's vision for the future, investment by the US activist fund Elliott Management has brought more complications.

The US investor intends to take advantage of shareholder dissatisfaction with the group's lacklustre stock market performance, and has even suggested a replacement for Walmsley be considered.

But the board of directors and some major shareholders have sided with Walmsley, at least temporarily putting out the fire.

"I'm genetically blessed with stamina and a degree of resilience," she told the Sunday Times at the end of June, referring to her father who was a senior Royal Navy officer.

According to the newspaper, Walmsley is also known for her discipline. Her appointments are timed to the minute and she has been known to leave business dinners at 9:00 pm sharp.

- 'Unafraid' -

The former head of French cosmetics giant L'Oreal, where she spent 17 years, Walmsley has come under fire in the past, including criticisms over her lack of experience in the pharmaceutical sector.

"I think having a fresh set of eyes is actually something that helps a lot," Walmsley said in 2017.

Born and brought up in Lancashire, northwest England, and a graduate of Oxford University, she was made a dame by Queen Elizabeth II in 2020, 10 years after joining GSK and running its consumer healthcare business before taking the firm's top job.

Under her leadership, GSK has been trying to revive itself, cleaning up its medicines development business after years of underperformance and increased competition.

The group, one of the largest pharmaceutical companies in the world, has 12,000 employees.

Married with four children, Walmsley is one of only a handful of women to head a group listed on the London Stock Exchange's flagship FTSE-100 index alongside Alison Rose, the head of NatWest bank, and Carolyn McCall, head of ITV.

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