Emma Walmsley, managing director of GlaxoSmithKline, is struggling to win over key shareholders after Elliott Management lured converts for a radical change at the pharmaceutical group, according to leading investors.
Ahead of GSK Investor Day next week, activist investor Elliott has cast doubt on whether Walmsley should stay to pass the transformation planned for the group after the split of its consumer health division last year.
One of the top 20 shareholders said some investors were drawn to a change in leadership after talks with Elliott, which took a multi-billion pound stake at GSK earlier this year. “His background is in consumption rather than healthcare, which may explain why,” he said.
Another major shareholder said it seemed Elliott didn’t want Walmsley to run the pharmaceutical business and that he could also push for a separate initial public offering of GSK’s vaccine unit, breaking the company further. further than expected. Elliott declined to comment.
At Wednesday’s event, shareholders are likely to question whether GSK should spend that much to catch up on cancer drugs, and whether it should instead try to bolster its pipeline in the short term to make up for the loss of exclusivity. on some HIV drugs later in the decade, or focus on next generation therapies in five to ten years.
Even shareholders who have yet to decide to back Elliott’s efforts are keeping a close watch on Investor Day. A top asset manager said he was “looking forward to capital markets day” and hearing what Walmsley had to say.
The CEO of GSK will focus her presentation – which kicks off a multi-day investor tour – on the promise of a ‘new GSK’, trying to prove that she has a clear vision to refresh the world. drug pipeline, if given time.
Luke Miels, president of GSK, which runs the business, compared the company to AstraZeneca, where he previously worked, which was also late in oncology but is now ahead of the curve.
“I think these things take time and then I remember meeting investors with Astra and being challenged with advances in oncology,” he said. “I think it’s about picking the right assets and moving forward. And we have a number of opportunities to seize.
Walmsley will present the company’s first long-term financial forecast, detail the future of its dividend policy and present its decision on the split and IPO of the consumer healthcare unit, or simply to its split.
It will be hard to please all shareholders, which range from investors keen to see an IPO of the consumer company to fund investments in innovative medicines, to those who fear that a listing simply means they have to. buy the shares again.
“I want to know what emerges with the pipeline promise and [have] confirmation that the mainstream company will be split, and not IPO, because I already own it and I don’t want to have to buy it to consolidate their balance sheet, ”said the second shareholder.
GSK’s board of directors and management team met with the 40 major shareholders in the run-up to the event.
“Shareholders tell us that they are very supportive of the strategy that we have set out, and they want us to continue to implement it and not get sidetracked,” the company said.
Additional reporting by Arash Massoudi