Emma Walmsley, chief executive of GlaxoSmithKline, is fighting to win over key shareholders after Elliott Management attracted converts for a radical change in the pharmaceutical group, according to major investors.
Ahead of GSK’s investor day next week, investment activist Elliott has sown doubt as to whether Walmsley should stay ahead. to transformation planned for the group after he spun his consumer health division last year.
A top-20 shareholder said some investors were attracted by a change in management after discussions with Elliott, who took a multibillion pound pile at GSK earlier this year. “Their bottom line is in the consumer as far as health care is concerned, which may be why,” he said.
Another major shareholder said Elliott did not want Walmsley to lead the pharmaceutical business and could even push for a separate initial public offering of GSK’s vaccine unit, breaking the company even further than expected. Elliott declined to comment.
At Wednesday’s event, shareholders are likely to wonder if GSK should spend so much to play into the recovery in cancer drugs, and whether it should try instead to tighten its pipeline at low cost to offset the loss of exclusivity for some HIV drugs later in the decade, or focused on next-generation therapies from five to 10 years out.
Even shareholders who have not yet decided to support Elliott’s efforts look closely at the day of the investor. A large wealth manager said they were “very attentive to the day-to-day capital markets” and that they had heard what Walmsley had to say.
GSK’s chief executive will focus her presentation – which kicks off a days-long investor showshow – on the promise of “new GSK,” trying to prove that she has the clear vision to refresh the drug pipeline. , if given time to do so.
Luke Miels, president of GSK, which runs the business, compared the company to AstraZeneca, where he worked, which was also behind oncology but which is now gone.
“I think these things take time and then I remember meeting investors with Astra and being challenged about the progress in oncology,” he said. “I think it’s about choosing the right goods and moving forward. And we have a lot of opportunities that come through.”
Walmsley will offer the first long-term financial forecasts for the company, detail the future of its dividend policy, and present its decision on whether to decouple and make an initial public offering of the consumer health unit, or simply spin it off.
It will be difficult to please all shareholders, ranging from investors eager to see an IPO of consumer activity to finance investments in innovative medicines, to those concerned that a list simply means they have. to buy back the shares.
“I want to know what emerges with the promise from the pipeline and [have] confirms that consumer activity will be disrupted, not IPO’d, as I already have and I don’t want to have to buy to support its balance sheet, ”the second shareholder said.
GSK’s board and executive team met with 40 major shareholders in preparation for the event.
“Shareholders tell us they are very supportive of the strategy we have established, and they want us to continue with delivery and not be distracted,” the company said.
Additional reports from Arash Massoudi