Glaxo to Outline Separation Strategy Amid Elliott Pressure


GlaxoSmithKline Plc, the U.K. drugmaker, will provide an update in June on the timing and approach to separating its consumer-health business as pressure increases to accelerate the company’s revival.

Chief Executive Officer Emma Walmsley pledged to give “a clear view of the strategy and growth outlook” with 10-year sales forecasts and details on which therapy areas Glaxo aims to mine after the consumer unit split.

Glaxo’s plans are in the spotlight following Elliott Management Corp.’s decision to build a stake in the pharmaceutical and vaccines giant. Walmsley on Wednesday faced questions from reporters on whether some shareholders would push for her to lead the consumer business, which she previously ran, rather than the drugs and vaccines operation.

“I’m not a scientist, I’m a business leader,” she said. “Ultimately the CEO should be held accountable for the results, and that’s why we are extremely focused with a very committed team to delivering shareholder value. We have made an enormous amount of change in this supertanker of a company.”

Since Walmsley took charge in 2017, she’s sought to refocus the company, boost its performance and rejuvenate the pipeline of new treatments. The following year, Glaxo announced plans to combine its consumer health unit with Pfizer Inc.’s and split off the business into a separate, U.K.-listed company. That effort isn’t scheduled for completion until next year.

The company is also trying to rebuild its cancer pipeline. Glaxo didn’t have any oncology drugs on the market when Walmsley started and now has three, with others in clinical trials.

Glaxo said profit and sales fell in the first quarter, hurt by continuing disruption from Covid-19, while the company reiterated its earnings forecast for the year. Vaccine sales declined 30% due to the impact of Covid on routine immunizations. Earnings per share, excluding some costs, were broadly in line with analyst estimates.

While Glaxo is awaiting emergency approval from U.S. regulators for its Covid-19 antibody treatment with Vir Biotechnology Inc., a potential blockbuster, the company has had mixed success with its Covid effort.

Glaxo has opted to use its adjuvant technology -- substances that enhance the immune response to vaccines -- in partnerships with other drugmakers rather than creating its own shot. A collaboration with Sanofi suffered a setback last year after a dosing error, with results from a new mid-stage trial now expected in May and the last phase set to start in June.

Glaxo also has a vaccine in advanced trials with Canada’s Medicago Inc. and a partnership with Germany’s CureVac NV to develop a next-generation shot capable of tackling multiple variants of the coronavirus. The company said Wednesday it had started an early-stage Covid-19 study using its self-amplifying mRNA technology in recent weeks.

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