GSK chief plans £400m science campus to grow after firm splits
GSK is close to a deal to build a £400million science campus in the UK that could create 5,000 highly skilled jobs as part of a super-charged growth plan.
The drugs giant has been seeking a property developer to transform 33 acres of land it owns in Stevenage into one of Europe’s biggest hives for life science start-ups. It is expected to make an announcement imminently.
The move to create a biotech nerve centre in the Hertfordshire town is part of an ambitious strategy drawn up by chief executive Emma Walmsley to revitalise GSK’s credentials as a life science innovator.
The City is eagerly awaiting the latest results of GSK’s trial next month of what it hopes will be a new blockbuster vaccine. The group is in a race with America’s Pfizer and France’s Sanofi to launch the first vaccines for a common viral respiratory disease.
GSK is the world’s leading vaccine company, with widely praised innovations such as its Shingrix jab for shingles, despite falling behind in the race for Covid inoculations.
Walmsley is preparing to split the company into two, separating the consumer healthcare brands from the drugs business. She wants to run the pharmaceuticals side and transform it into a vaccine and drugs powerhouse.
The consumer arm, Haleon, will list on the stock exchange as a separate entity, with brands including Sensodyne and Panadol.
GSK will release its prospectus for the separation within weeks. Documents will detail the financial arrangements for the break-up – including how the firm’s debt pile will be split between the two companies.
French bank Societe Generale said the two businesses could be worth much more than previously thought, with a combined value of as much as £115billion, up from around £90 billion today.
It forecast that the new GSK pharmaceuticals business could be worth £18.12 per share on its own – higher than the current share price for the whole group. That would still lag behind Britain’s other major pharmaceuticals group, AstraZeneca, which has a market value of more than £160 billion.
‘Spinning off GSK Consumer in mid-July will be a catalyst for both the new listed entities,’ Societe Generale said in a report.
The bank believes the new RSV vaccine could be ‘this decade’s most material milestone for New GSK’.
Construction on the research campus, which will be of national importance in Britain’s race to compete globally in the sector, could begin before the end of this year.
GSK has a 92-acre research and development site in Stevenage and plans to erect the new facility on unused land. The town is already the biggest cell and gene therapy research cluster in the UK and the third-largest in the world.
Walmsley, who worked at L’Oreal before joining GSK in 2017, has drawn up a blueprint for consistent growth over the next five years that she hopes will silence her critics and deter predators.
She has drawn criticism from activist investor Elliott Advisors, which believes the board should consider other candidates with more phar maceutical experience for the top job.
Elliott took a stake in the company after identifying a significant underperformance compared with AstraZeneca.
Frustrations with GSK increased when it fell behind in the quest to produce a Covid vaccine.
Haleon has already been a target for bidders and more offers could emerge after it is listed on the stock exchange. Unilever made a £50 billion bid for the business and it emerged last week that Nestle has also made a bid.
GSK is facing other problems, including votes in April by workers at several British plants owned by the company to go on strike over pay.
Unions have criticised a ‘derisory’ 2.75 per cent rise as a ‘substantial real-terms pay cut’.
The board has also suffered an investor rebellion over executive remuneration.
Nearly 40 per cent of voting shareholders opposed the company’s remuneration policy following the introduction of a more generous bonus scheme for executives.
Walmsley was paid £8.2million last year and has earned £34 million since taking the job in 2017.