Jan Leschly: This One Didn't Clear The Net

Jan Leschly is on the defensive. Following the acrimonious Feb. 23 collapse of merger talks between SmithKline Beecham and Glaxo Wellcome, Leschly, a tennis pro turned SmithKline CEO, is under pressure from investors to get a deal.

Leschly nixed the Glaxo deal after a Feb. 20 meeting with Glaxo CEO Richard Sykes in which, a former SB insider says, the exec discovered that the proposed combination was "not a merger, but a takeover." But investors were upset that the deal had come apart: They knocked SmithKline's value down by $6.6 billion.

SmithKline is profitable--earnings rose 17%, to $2.7 billion, in 1997--but it ranks ninth in prescription-drug sales, down from third in 1989. And while its investments have turned up many leads for new drugs, SmithKline lacks the R&D funds to pursue all of them.

Roche Holdings, Schering-Plough, Warner-Lambert, and Britain's Zeneca are all possible partners. Now, Leschly, 57, has to prove he can fight back from two sets down.

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