GSK unveils strategy for recovery

GlaxoSmithKline hopes to convince investors that focusing on consumer health and vaccines will bring back longterm growth.

It scrapped plans to float its HIV drug business ViiV Healthcare, citing its strong outlook, and promised to pay a dividend of 80p a share over the next three years.

Chief executive Sir Andrew Witty is under pressure to prove to investors that a £13.1 billion plus asset swap with Novartis can revive GSK’s fortunes.

The move follows a slide in lung-drug sales and a major corruption scandal in China.

Britain’s biggest drug maker, which is building a £35 million pharmaceutical plant in Montrose, expects group sales to rise by a low-to-mid single-digit percentage rate annually to 2020.

To protect its dividend, GSK scaled back plans to return £4bn from the Novartis transaction to investors, and will instead pay £1bn as a special dividend.

It sold its cancer drugs portfolio to Novartis, while buying Novartis’s vaccines, and boosted its consumer health business through a joint venture with the Swiss company.

At today’s annual meeting new chairman Philip Hampton needs to show the strategy can reverse years of underperformance.

Quarterly sales stayed at £5.62bn, and core earnings per share were down 18% at 17.3p.

Under pressure: Sir Andrew Witty.