By promoting Emma Walmsley on Tuesday to succeed Andrew Witty as the next GlaxoSmithKline chief executive, the company is breaking new ground. But given that she currently runs the consumer health unit, the move suggests Glaxo will continue to pivot away from its traditional pharmaceuticals business.
Next March, Walmsley, 47, will become the first woman to head a large, global brand-name drug maker. This is a big deal in an industry so thoroughly dominated by men. The only other comparable exception is Ken Frazier, an African-American who has run Merck for five years after ascending through the ranks.
Yes, Heather Bresch is chief executive at Mylan Pharmaceuticals, which is vying with Wells Fargo for corporate scandal of the month thanks to price hikes on EpiPen. But Mylan, by and large, sells generic drugs and so is not as heavily invested in research as brand-name companies.
But while the Glaxo board deserves credit, the drug maker is also continuing a long-standing trend in the pharmaceutical industry — tapping someone without a science background as chief executive. And the decision appears to buttress a shift Glaxo has been making away from prescription drugs. It is worth noting that Walmsley was chosen instead of Abbas Hussain, who heads the global pharma business.
Walmsley arrived at Glaxo five years ago from L’Oreal, the cosmetics giant, and since then, has turned the consumer health unit into an increasingly important part of the Glaxo corporate pie. The unit sells such brands as Sensodyne toothpaste, Theraflu cold medicine, and the Voltaren pain reliever.
In the second quarter, consumer health care revenue rose 7 percent compared with the lackluster 2 percent rise in sales that was posted by the pharmaceuticals business. In discussing recent financial results, the company made a point of noting that consumer health operating margins rose 14 percent.
Given that Glaxo has lagged many of its competitors and is struggling to regain its strategic footing, there was talk among investors that it was time to hire someone from the R&D world. The hope has been to harness the potential in the labs and recognize promising prospects to acquire or license.
This reasoning has been, in part, a reaction to the direction Witty, 52, has taken the company. He has tried to refocus Glaxo with a bold move — in 2014, he swapped the Glaxo cancer business for the Novartis vaccine unit, and then created a joint venture in consumer health products with Novartis.
To what extent this overhaul will prove correct will take time to sort out. Although some investors disagree, Witty believes getting paid for high-priced cancer drugs will be challenging. Meanwhile, Glaxo also received $16 billion from Novartis as part of the deal and now projects big growth in vaccine sales this year.
Having solidified the importance of the consumer health unit, Walmsley must revive the prescription drug business. The unit has struggled in the United States, for instance, to maintain its key respiratory franchise, which dominates the overall pharma unit, but is grappling with declining sales of its Advair asthma drug and pressure from payers.
Her challenge now is to bolster pharmaceutical innovation, but whether her long-term focus turns toward splitting the company is uncertain, a topic that has been speculated for some time.
“I think the drug world is changing,” Daniel Mahony, a fund manager at Polar Capital in London, told Bloomberg News. “It’s not just about getting data to get drugs approved. It’s also about getting data to get drugs reimbursed and paid for. And that’s all about generating value and effectiveness and real-world data. That’s what consumer products are about.”
“Emma holds an MA in Classics and Modern Languages from Oxford University.”
WOW, I’m impressed! Really!
They also removed the zinc from Fixodent due to a single case of a woman who suffered neurological damage by using 40x the usual dose. Since zinc is the catalyst that actually guves Fixodent its adhesive properties many more embarrassing questions have arisen at dinner parties ( e.g. why are your teeth floating in your soup?).
Comments are closed.