Emma Walmsley, CEO of GlaxoSmithKline, faces a struggle to win key shareholders after Elliott Management attracts converts to radical change in the pharmaceutical group, according to major investors.
Faced with GSK’s investment day next week, activist investor Elliott has cast doubt on whether Walmsley should stay ahead the transformation planned for the group after it took off from theirs consumer health division last year.
One of the top 20 shareholders said some investors were drawn to a change in management after talks with Elliott, who took a multimillion-pound stake at GSK earlier this year. “His background is more of the consumer than the health, which may be why,” he said.
Another major shareholder said it appeared Elliott did not want Walmsley to lead the pharmaceutical business and could also be pushing for an initial public offering independent of GSK’s vaccine unit, breaking the company even more than expected. Elliott declined to comment.
At Wednesday’s event, shareholders are likely to wonder if GSK should spend so much on recovering cancer drugs and if it should try to strengthen its pipeline in the short term to make up for the loss of exclusivity of some. HIV. drugs later in the decade or focus on next-generation therapies for five to ten years.
Even shareholders who have not yet decided whether to support Elliott’s efforts are watching investors ’day closely. A great asset manager said he was “looking forward to the capital markets day” and they were listening to what Walmsley has to say.
GSK’s chief executive will focus his presentation, which kicks off a showhow for day investors, on the promise of “new GSK”, trying to show that he has a clear vision of cooling the pipeline, if given the time to do so. ho.
Luke Miels, president of GSK, which runs the commercial business, compared the company to AstraZeneca, where he previously worked, which also lagged behind in oncology, but has now advanced.
“I think these things take time and then I remember meeting investors with Astra and being challenged by the progress in oncology,” he said. “I think it’s about choosing the right assets and moving forward. And we have several opportunities that come our way. ”
Walmsley will provide the first long-term financial forecasts for the company, detail the future of its dividend policy and present its decision on whether to undo and make an initial public offering of the consumer healthcare unit or simply derive -the.
It will be difficult to please all shareholders, ranging from investors eager to see an IPO of the consumer business to finance investments in innovative medicines, to those who are concerned that a quote simply means they have to buy back the actions.
“I want to know what is emerging with the promise of the pipeline and [have] confirmation that the consumer business will be disconnected, not IPO, as I already have it and I don’t want to have to buy it to consolidate its balance sheet, ”the second shareholder said.
GSK’s board of directors and executive team have met with the 40 largest shareholders ahead of the event.
“Shareholders tell us they are very supportive of the strategy we have proposed and they want us to continue with their delivery and not be distracted,” the company said.
Additional reports by Arash Massoudi