GSK chief hits back at critics with deal for Covid drug

Pharmaceutical giant beats earning forecasts as activist investor Elliott questions boss Walmsley’s position

GLAXOSMITHKLINE boss Dame Emma Walmsley brushed off pressure from activist investor Elliott Management as the drug maker beat earnings forecasts and struck a new deal with the EU for its experimental Covid-19 drug.

Britain’s second largest pharmaceutical company said a predicted fall in profits this year would be slightly lower than expected as demand for vaccines post-lockdown led it to post a 6pc rise in revenues to £8.1bn for the second quarter compared with a year earlier.

Adjusted earnings per share, GSK’S preferred profit measure, totalled 28.8p per share, better than analysts had predicted.

Separately yesterday, GSK secured an agreement to supply the European Union with 200,000 doses of its Covid19 antibody therapy. If it gains full approval, the therapy will be used to treat high-risk patients with coronavirus who are suffering from mild symptoms.

GSK’S shares rose by almost 2pc after the announcement. Around 12pc has been wiped off GSK’S value over the past year.

Dame Emma’s future has been thrown into doubt in recent months after Elliott took a multi-billion stake in GSK and in effect demanded that Dame Emma reapply for her job as chief executive. The company is preparing to spin out its consumer healthcare division and list it separately, with the remaining business retaining a stake.

Elliott has questioned whether Dame Emma is the right person to lead the “New GSK” but the board has rejected its calls.

Dame Emma shrugged off pressure from Elliott yesterday adding that the latest results were “a building block in getting where we want to be”.

She said: “We listen to all of our shareholders, we talk to them, and what they are telling us matters is that we are focusing on delivery and execution.”

GSK said sales in its vaccine division proved particularly strong in the second quarter, with revenue soaring 39pc following increased demand for its meningitis, hepatitis and diphtheria jab.

The division suffered during the height of the pandemic as households isolated and healthcare services focused on fighting the virus. GSK’S efforts in the race to develop a Covid-19 vaccine were set back after the jab it was working on with French firm Sanofi was delayed late last year due to its failure to produce an immune response.

GSK’S rivals have enjoyed a major boost from vaccines developed during the pandemic, including Pfizer which yesterday increased its full-year revenue forecasts for its jab by almost a third to $33.5bn (£24.2bn). Pfizer has emerged as one of the leaders in Covid-19 vaccines alongside Moderna, with the UK alone having ordered 100m doses.

Dame Emma said she was “frustrated” by the delay but denied that GSK

‘Covid is not done yet when you have 13pc of the world fully vaccinated and the ongoing delta variant’

had missed the boat on creating a vaccine to fight coronavirus.

She said: “Covid is not done yet when you have 13pc of the world fully vaccinated and obviously as we have seen, the ongoing high infection rate of the delta variant and a lot of thoughtfulness about how the Covid environment is going to keep evolving.”

Dame Emma said health systems were at very different stages of coping with the pandemic across the world, but added that in some countries including the US, where vaccination rates have been high, business was likely to return to normal by the end of the year. This is expected to drive up sales of other parts of its business as hospitals are able to start other therapies again after more than a year of Covid-19 pressures.

GSK’S shares closed up by 0.2pc at £14.01.