Glaxo Holders Back Board in Face of Elliott Stake, Mail Reports

Three shareholders of GlaxoSmithKline Plc are backing the board as the U.K. pharmaceutical giant faces increasing pressure to speed-up a turnaround plan after activist investor Elliott Management Corp. bought a stake, the Mail on Sunday reported.

BlackRock Inc., Glaxo’s biggest investor, as well as Dodge & Cox and Royal London Asset Management Ltd. have all pledged their support to Chairman Jonathan Symonds ahead of a possible battle with Elliott over strategy, the London-based newspaper reported, without citing where it got the information. Glaxo didn’t immediately respond to an email seeking comment.

The company is in the middle of a turnaround effort led by Chief Executive Officer Emma Walmsley, who has been in post since 2017. Glaxo has lagged behind competitors, notably fellow British drugmaker AstraZeneca Plc, after it moved away from lucrative areas like oncology, which Walmsley has been trying to rebuild.

Speaking at Glaxo’s annual general meeting earlier this month, Symonds said the company was now “doing the right things” and asked shareholders to judge it on the results. Glaxo is preparing to split in two next year, spinning off its consumer unit and leaving the remaining company focused on biopharma and vaccines.

While Elliott hasn’t disclosed its rationale for purchasing a stake, the U.S. firm has a history of pushing under-performing businesses to accelerate efforts and boost shareholder returns, especially if it decides leadership is dragging its feet.

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