Glaxit: Flagging a looming threat from Gilead and a weak pipeline, Neil Woodford is giving up on GSK and pulling out

After watching GlaxoSmithKline grow increasingly hampered by a weak pipeline and “stretched” financials, longtime investor Neil Woodford has decided to quit the pharma giant, worried that a rival HIV therapy from Gilead may soon cripple ViiV, the pharma giant’s one bright spot.

Emma Walmsley, GSK

In a lengthy blog post today titled Glaxit, Woodford noted that he’s been advising the company for years now to split up and do something positive for investors. Former CEO Andrew Witty, though, rejected the suggestions and new CEO Emma Walmsley seems set on the same path.

Noted Woodford:

Even before taking her seat she has been keen to portray herself as a ‘continuity candidate’ and the prospect of a Glaxo breakup now looks more remote than ever.

He also spelled out the threat from Gilead:

I have become more concerned about the prospects for the one Glaxo engine that has been firing on all cylinders. ViiV’s most important products, Triumeq and Tivicay, have been delivering robust growth over the past few years but that may now not be sustainable. There is a growing competitive threat in this market which could undermine Glaxo’s franchise. US biotech company Gilead is currently conducting trials in a potential competitor to ViiV’s Triumeq. Phase II data released in February suggested that this new treatment could undermine Glaxo’s hitherto robust market position ­­– phase III data is due later this year.

Woodford has been hampered himself recently after some of his bets on companies like Circassia and Northwest Bio turned sour. He made his rep as a blue chip investor in companies like GSK, but that haven no longer works as far as GSK is concerned.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
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Atlas Venture Cambridge, MA

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