GSK delivers a shot in the arm for Walmsley

As she faces onslaught from activist investors . . .

EMBATTLED Glaxosmithkline (GSK) boss Emma Walmsley scored a victory against her detractors as she upgraded its full-year guidance.

The FTSE100 pharma giant is due to see earnings in 2021 fall by between 2pc and 4pc, less than the ‘mid-to-high single digit decline’ previously predicted.

GSK shares jumped 0.5pc, or 7.6p, to 1441.8p on the back of the news.

The update came as the firm posted better than expected results for the third quarter, with revenues rising 5pc to £9.1bn.

Growth was reported across all of GSK’s core divisions, with revenues in its pharmaceuticals business up 5pc to £4.4bn, while vaccines climbed 7pc to £2.2bn and consumer healthcare was lifted 3pc to £2.5bn.

The group raked in £209m from its Covid-19 treatments including £114m from Xevudy, which reduces the risk of hospitalisation and death in patients suffering from the disease.

A dividend of 19p per share for the quarter was also announced, as well as predictions of a ‘meaningful improvement in revenues’ next year.

Analysts at Citi were upbeat, predicting that demand for GSK’s Shingrix vaccine, used to protect adults from the shingles virus, will ‘accelerate’ as vulnerable people received booster Covid-19 vaccines.

‘GSK has delivered another quarter of strong business performance,’ said Walmsley. ‘This has allowed us to improve our full-year guidance and, alongside the progress in strengthening our [research and development] pipeline, reinforces our confidence in the outlook for a step-change in growth and performance in 2022 and beyond.’

The results will provide a shot in the arm for the 52-year-old (pictured), one of only a handful of female chief executives in the FTSE100. She has come under pressure from activist investors in recent months as she tries to drum up shareholder support for plans to split off the company’s consumer healthcare business into a separately listed company, scheduled for the middle of next year.

Activists Elliott Management and Bluebell Capital have questioned Walmsley’s plans to list the consumer arm, which makes products including Sensodyne toothpaste and Panadol painkillers, suggesting that it would be better if GSK sold it off outright.

They have also called for the chief executive to reapply for her own job, noting her lack of a formal scientific background. Bluebell has also called for chairman Sir Jonathan Symonds to be replaced. However, Walmsley, alongside management, has pushed back against the activists by bringing in several heavyweight scientists to beef up its board.

The latest of these is Harry Dietz, a professor of genetics at the Johns Hopkins University School of Medicine in the US, who is due to join the company as a non-executive director at the start of next year. Dietz will sit on the science committee and scrutinise research into its pipeline of new drugs and vaccines. A board for the soon-to-be separate consumer health business is also in the works, with its chairman scheduled to be unveiled before the end of this year.

GSK is also sweetening the deal for shareholders with an £8bn dividend for the consumer business, which is planned to be paid out in the second quarter of 2022.

‘Another quarter of strong performance’