GlaxoSmithKline Plc promoted Emma Walmsley to succeed Andrew Witty as chief executive officer when he retires, singling out the U.K.’s largest drugmaker as the only major global pharmaceutical company led by a woman.
Walmsley currently leads Glaxo’s consumer health business. She will join the board on Jan. 1 and take the helm of the London-based company on March 31, Glaxo said in a statement on Tuesday.
The 47-year-old Oxford graduate, whose background is in marketing rather than science, will be tasked with piloting cutting edge treatments for cancer and infectious diseases through clinical tests and onto pharmacy shelves to boost earnings and revive Glaxo’s shares. Chairman Phil Hampton had said he was looking outside as well as within the company for a new leader.
“I think it’s actually better to have somebody who’s more familiar with Glaxo, from working on the inside, rather than an external candidate,” said Stephen Bailey, a fund manager at Liontrust Investment Partners LLP in London with 800 million pounds ($1 billion) under management, including Glaxo shares. “I would assume in the long term the likelihood is that the consumer division is split away.”
Few Women
Picking Walmsley means Glaxo probably will retain its consumer business rather than split it off, analysts at Liberum Capital said in a note to clients. Witty has described a view of the industry in which companies must move away from single blockbuster medicines and instead build a broad stable of solid earners such as vaccines and consumer products. In a March interview, Witty said the consumer health business -- known for its Sensodyne toothpaste and Tums antacids -- could in a few years generate enough cash to cover half the dividend Glaxo pays to investors.
Walmsley will join a small pool of women leaders in the pharmaceutical world. Among them are Heather Bresch, who heads the much smaller Mylan NV. Her promotion also makes her the first female chief among the FTSE100’s biggest companies. Others include Imperial Brands Plc’s Alison Cooper, Royal Mail Plc’s Moya Greene, Severn Trent Plc’s Olivia Garfield, Kingfisher Plc’s Veronique Laury-Deroubaix, EasyJet Plc’s Carolyn Julia McCall and Whitbread Plc’s Alison Brittain.
That may be one reason why even some investors who’d called for a very different person to replace Witty -- someone from outside the company with science experience -- rallied behind her.
“While Emma doesn’t have a lot of drug development experience, I think the drug world is changing,” said Daniel Mahony, a fund manager at Polar Capital LLP in London, which owns shares of Glaxo. “It’s not just about getting data to get drugs approved. It’s also about getting data to get drugs reimbursed and paid for -- and that’s all about generating value and effectiveness and real-world data. That’s what consumer products are about.”
Witty has run Glaxo for almost a decade. Once hailed as one of the pharmaceutical industry’s most visionary managers, the 52-year-old has faced criticism for Glaxo’s lagging share performance and sluggish sales. A bribery scandal in China that led to a $489 million fine last year also tarnished his image, which he had built with initiatives to develop the world’s first malaria vaccine and reform the way medicines are marketed to doctors.
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