The under-fire boss of Glaxosmithkline (GSK) has promised a ‘step-change’ in the company’s performance this year as she fends off activist investors.
Emma Walmsley said the drug maker has overcome ‘many years of challenges’ and would be able to start growing rapidly in 2022.
GSK is under attack from notorious US activist group Elliott Management as the FTSE 100 firm prepares to separate into two firms.
Under fire: Glaxo chief exec Emma Walmsley (pictured) said the firm has overcome ‘many years of challenges’ and would be able to start growing rapidly in 2022
In full-year figures, it reported a 5 per cent rise in turnover to £34billion while profits slumped 22 per cent to £5.4billion, partly because the year before it was boosted by the sale of its Horlicks business.
It made £1.4billion from its Covid treatments in 2021. This included £958million from its antibody treatment sotrovimab, which cuts the risk of hospitalisation and death by 79 per cent in Omicron patients.
But the £1.4billion is a far cry from the huge sums generated by big pharmaceutical rivals such as Pfizer, which made £27billion from its Covid work last year and expects to make another £40billion this year.
GSK was the world’s largest vaccine maker before the pandemic but failed to produce a Covid jab.
Its second attempt to make a vaccine has been delayed as there are too few people to test it on, with more than 4billion people worldwide estimated to be fully vaccinated.
GSK also fell behind rivals including Astrazeneca, which is expected to have made around £2.4billion from its Covid products last year, and US group Moderna.
Walmsley, 52, is spinning off GSK’s consumer health business, which makes Sensodyne toothpaste and Panadol pain relief, from its main pharmaceuticals group through a stock market listing this year.
According to Walmsley, shareholders supported the move to separate the business rather than to sell it, despite recently rebuffing three takeover offers for the consumer unit from Unilever, the last of which valued it at £50billion.
She said: ‘We have a lot of encouragement to stay very focused on this demerger.’
The company predicts that sales for the new pharmaceuticals and vaccines business, called New GSK, will climb between 5 per cent and 7 per cent in 2022, while profits will rise by as much as 14 per cent.
The upbeat outlook is likely to bolster the chief executive, who has led GSK since 2017, as she battles Elliott and another smaller London activist Bluebell Capital Partners.
Elliott wants Walmsley to reapply for her job when the consumer division is hived off. The hedge fund claims she would not be fit to lead the stand-alone drugs company as her background before GSK was in consumer businesses, including a 17-year stint at L’Oreal.
Walmsley has had a series of victories recently, with a revolutionary HIV treatment getting the green light from British health authorities in November.
It also poached one of Pfizer’s top vaccine executives – but is losing the company’s top scientist, Hal Barron, to lead a Silicon Valley anti-ageing start-up backed by Amazon founder Jeff Bezos.
Sebastian Skeet, analyst at Third Bridge, said stubborn problems persist. He said: ‘2022 is unlikely to give the company much respite after a rollercoaster end to 2021.
‘Activist pressure continues to mount with no reprieve from Bluebell Capital Partners and Elliott Management for chief executive Dame Emma Walmsley.’