GSK makes a little history while outlining a familiar future
GlaxoSmithKline made pharma history today by appointing Emma Walmsley as the first woman to run a global drug maker. And she will have to measure up to the best in the business if GSK is to break out of the rut it finds itself in.
The pharma giant made some major turns under Andrew Witty: swapping cancer drugs for vaccines and cash with Novartis, insisting on adopting an ethical stance in consumer sales and breaking up its research teams into smaller, more agile units.
But after eight years under Witty, the company’s pipeline — aside from some respiratory and HIV work — is the least exciting among the big 10. The smaller teams failed to produce the grand slams that are needed to sustain a global giant. The ethical stance was overtaken by a world-class bribery scandal in China. Vaccines are an unexciting alternative to cancer, particularly at this stage of the oncology revolution. And rather than signaling a new day with a change-up in the R&D strategy, Walmsley’s most recent insider role as CEO of consumer health will spotlight its continuation of many of the same themes that landed the company in this spot.
In an interview posted on the company’s website, Walmsley struck all the expected notes. A marketing specialist who completed a 17-year stint at L’Oreal, Walmsley won’t have any trouble with corporate language. Common themes: Patients come first. Meds must be differentiated. The staff is exceptional. And so on. But at this stage of the game, GSK may need to think about learning a new script if it expects to win back investors.
GSK belongs to a block of Big Pharmas, like Roche, which have largely shunned the M&A route. Unlike Roche — which has enjoyed a string of big drug approvals from Genentech and is lining up a possible megasuccess with the MS drug ocrelizumab — GSK isn’t on anyone’s list of R&D leaders.
Barring a bold new vision in R&D in a company that spends $4.5 billion a year on drug research, the new CEO’s first task may well be returning to a common question: Should GSK break up? The betting now, though, is that an insider like Walmsley will be unlikely to split things up. That leaves its commitment to a fat dividend as the one tried and true strategy to keep investors content with its lack of performance elsewhere.