Glaxo names Em­maWalm­s­ley as new CEO to suc­ceed An­drewWitty

China Daily (USA) - - Q & A WITH CEO - By BLOOMBERG

Glax­oSmithK­line Plc pro­moted Emma Walm­s­ley to be its new chief ex­ec­u­tive of­fi­cer and suc­ceed An­drew Witty when he re­tires, sin­gling out the UK’s largest drug­maker as the only ma­jor global phar­ma­ceu­ti­cal com­pany led by a woman.

Walm­s­ley cur­rently leads Glaxo’s con­sumer health busi­ness. She will join the board on Jan 1 and take the helm of the Lon­don-based com­pany on March 31, Glaxo said in a state­ment on Tues­day.

The 47-year-old Ox­ford grad­u­ate, whose back­ground is in mar­ket­ing rather than science, will be tasked with pi­lot­ing cut­ting-edge treat­ments for can­cer and in­fec­tious dis­eases through clin­i­cal tests and onto phar­macy shelves to boost earn­ings and re­vive Glaxo’s shares. Chair­man Phil Hamp­ton had said he was seek­ing out­side as well as in­side for a newleader.

“I think it’s ac­tu­ally bet­ter to have some­body who’s more fa­mil­iar with Glaxo, from work­ing on the in­side, rather than an ex­ter­nal can­di­date,” said Stephen Bai­ley, a fund man­ager at Lion­trust In­vest­ment Part­ners LLP in Lon­don with 800 mil­lion pounds ($1 bil­lion) un­der man­age­ment, in­clud­ing Glaxo shares. “I would as­sume in the long term the like­li­hood is that the con­sumer di­vi­sion is split away.”

No Science

As was the case for Joe Jimenezwhenhe took over at ri­val No­var­tis AG, Walm­s­ley’s back­ground isn’t rooted in phar­ma­ceu­ti­cals.

She joined the Bri­tish drug­maker in 2010 from French cos­met­ics gi­ant L’Oreal SA where she spent 17 years, hold­ing mar­ket­ing and gen­eral man­age­ment roles in China and the US.

While liv­ing in Shang­hai with her hus­band David and four chil­dren, Walm­s­ley at­tended a net­work­ing lunch with Witty, she wrote in an on­line blog post­ing for Sheryl Sand­berg’s Lean In web­site.

Bungee Jump

“An in­spir­ing con­ver­sa­tion ended up spi­ral­ing into a job of­fer alarm­ingly fast,” Walm­s­ley said. The op­por­tu­nity to run a busi­ness with oper­a­tions in 100 coun­tries, 5 bil­lion pounds in sales and thou­sands of em­ploy­ees seemed over­whelm­ing. She was plagued with con­cerns that she was be­ing dis­loyal to L’Oreal, and un­fair to her fam­ily.

Ac­cept­ing Witty’s of­fer felt like a “bungee jump” — but one she took with her hus­band’s sup­port.

At Glaxo, Walm­s­ley joined the over-the-counter prod­ucts busi­ness, first as pres­i­dent and then as CEO in 2015, fol­low­ing a three-part trans­ac­tion with No­var­tis AG. She holds a de­gree in clas­sics and mod­ern lan­guages from Ox­ford Univer­sity. Em­maWalm­s­ley,

The stock has climbed about 40 per­cent dur­ing Witty’s ten­ure at the helm. That’s in line with No­var­tis’s per­for­mance, though it lags be­hind lo­cal ri­val As­traZeneca Plc’s 140 per­cent ad­vance.

Un­der Walm­s­ley’s lead­er­ship, core op­er­at­ing mar­gins at the con­sumer unit dou­bled to 14 per­cent in the quar­ter ended June from a year ear­lier, bring­ing Glaxo closer to its aim of 20 per­cent op­er­at­ing profit mar­gin for the di­vi­sion by 2020.


Pick­ing Walm­s­ley means Glaxo prob­a­bly will re­tain its con­sumer busi­ness rather than split it off, an­a­lysts at Liberium Cap­i­tal said in a note to clients. Witty has de­scribed a view of the in­dus­try in which com­pa­nies must move away from sin­gle block­buster medicines and in­stead build a broad sta­ble of solid earn­ers such as vac­cines and con­sumer prod­ucts. In a March in­ter­view, Witty said the con­sumer health busi­ness — known for its Sen­so­dyne tooth­paste and Tums antacids — could in a few years gen­er­ate enough cash to cover half the div­i­dend Glaxo pays to in­vestors.

Walm­s­ley will join a small pool of women lead­ers in the phar­ma­ceu­ti­cal world. Among them areHeather Bresch, who heads the­muchs­mall­erMy­lan NV. Her pro­mo­tion al­so­makes her the first fe­male chief among the FTSE100’s big­gest com­pa­nies.

Oth­ers in­clude Im­pe­rial Brands Plc’s Al­i­son Cooper, Roy­alMail Plc’sMoya Greene, Sev­ern Trent Plc’s Olivia Garfield, King­fisher Plc’s Veronique Laury-Der­oubaix, EasyJet Plc’s Carolyn Ju­lia McCall.

That­may be one rea­son­why even some in­vestors who’d called for a very dif­fer­ent per­son to re­place Witty — some­one from out­side the com­pany with science ex­pe­ri­ence— ral­lied be­hind her.

“While Emma doesn’t have a lot of drug de­vel­op­ment ex­pe­ri­ence, I think the drug world is chang­ing,” said Dan Ma­hony, a fund man­ager at Po­lar Cap­i­tal LLP in Lon­don, which owns shares of Glaxo. “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.”

Witty has run Glaxo for al­most a decade. Once hailed as one of the phar­ma­ceu­ti­cal in­dus­try’s most vi­sion­ary man­agers, the 52-year-old has faced crit­i­cism for Glaxo’s lag­ging share per­for­mance and slug­gish sales. A bribery scan­dal in China that led to a $489 mil­lion fine last year also tar­nished his im­age, which he had built with ini­tia­tives to de­velop the world’s first malaria vac­cine and re­form the­way medicines are mar­keted to doc­tors.

An in­spir­ing con­ver­sa­tion ended up spi­ral­ing into a job of­fer alarm­ingly fast. ”

new chief ex­ec­u­tive of­fi­cer of Glax­oSmithK­line Plc

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