GlaxoSmithKline Names Emma Walmsley as Next Chief Executive -- Update
September 20 2016 - 4:45AM
Dow Jones News
By Denise Roland
LONDON-- GlaxoSmithKline PLC said its head of consumer
health-care, Emma Walmsley, will succeed Andrew Witty as chief
executive.
Ms Walmsley, 47, will take up the post when Mr. Witty steps down
on March 31, making Glaxo the only large pharmaceutical company to
be led by a woman. She currently runs the consumer health-care
division, which sells drugstore staples such as toothpaste and
painkillers.
Her appointment is likely to draw a mixed response from
investors, some of whom were eager to see someone from a
pharmaceutical background take up the role, to breathe new life
into the company's drug pipeline, which has suffered some setbacks
in recent years.
Glaxo shares were down 0.7% Tuesday morning following the
news.
Still, Ms. Walmsley, who spent most of her career at cosmetics
giant L'Oréal before joining Glaxo in 2010, is well-respected
within the company: she has presided over a period of rapid
expansion of Glaxo's consumer health-care unit following the
formation of a joint venture with Novartis AG.
Since that deal closed last year, the consumer health-care
business has been a key source of growth for the company as its
huge prescription drug business struggles with the decline of its
old blockbuster drug Advair.
Her strategy: to champion a selection of "power-brands," such as
toothpaste Sensodyne, where she believes the consumer health-care
division can achieve the strongest growth.
Ms. Walmsley will take the reins in the midst of a strategic
shift engineered by her predecessor. While other major drug
companies increasingly focus on expensive new therapies for cancer
and other diseases, Mr. Witty, 52, has put increasing emphasis on
low-margin, high-volume consumer health-care products and
vaccines.
He achieved that largely through a large three-part $20 billion
deal with Novartis that involved swapping Glaxo's cancer drug
portfolio with the Swiss company's vaccines business and pooling
their consumer health-care businesses into a joint venture
controlled by the U.K. company.
Mr. Witty engineered the transaction to reduce Glaxo's
dependence on the risk-laden drug-discovery part of the business,
which succeeds or fails on the outcomes of lengthy and expensive
clinical trials, patent life cycles and the willingness of
governments and health insurers to spend ever-tighter budgets on
medicines. By contrast, vaccines and consumer health care are
considered more stable businesses.
That move is starting to bear fruit: Glaxo has posted solid
revenue and earnings growth for the past few quarters.
Glaxo said Ms. Walmsley will join its board of directors on Jan.
1 before becoming CEO on March 31.
Write to Denise Roland at Denise.Roland@wsj.com
(END) Dow Jones Newswires
September 20, 2016 04:30 ET (08:30 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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