Glaxo's New CEO Walmsley Pledges to Make Drugs the Priorityby
Drugmaker reports 31 percent gain in first-quarter profit
Walmsley says company will need to make ‘tough’ choices
Emma Walmsley pledged to spur growth at GlaxoSmithKline Plc’s pharmaceutical unit less than a month after taking over as chief executive officer of the U.K.’s largest drugmaker.
“We are a science-based company,” Walmsley, who had been head of Glaxo’s consumer products division before her appointment in September, told reporters on Wednesday. “Our focus has got to be around strengthening the pipeline in all three businesses, but the priority is in the pharma business.”
The drugmaker will need to make “tough choices” on allocating capital and may stop development in some areas amid increasing competition, according to its first female chief. She also emphasized the benefit of having pharma, vaccines and consumer businesses under one umbrella, partly due to the drug industry’s volatility.
Glaxo will focus on “making the right choices to develop our pharma pipeline, which is promising but unproven,” she said. “We have a lot of work to do.’’
Profit rose 31 percent in the first quarter, aided by a weaker pound and rising sales of drugs including its HIV treatments. Walmsley aims to boost revenue from new drugs to help offset eroding sales of top-selling asthma medicine Advair. The company is counting on those products, including its blockbuster HIV medicines and vaccines for meningitis, to generate 6 billion pounds ($7.69 billion) in annual sales next year.
Shares of Glaxo fell 0.8 percent to 1,586.50 pence as of 2:36 p.m. in London trading. The stock has gained almost 10 percent in the past year.
Earnings per share excluding certain costs rose to 25 pence a share in the first quarter, the London-based company said Wednesday. That compared with the 24.5-pence average of analysts’ estimates compiled by Bloomberg.
Glaxo reiterated its February forecast that profit growth this year was at risk of getting wiped out by drugmakers who want to start marketing cheaper copycat versions of Advair in the U.S. A delay to the launch of Mylan NV’s generic version in the U.S. gives Glaxo more “breathing room” to keep expanding its replacement drug Breo, according to Bloomberg Intelligence.
The drugmaker, which earns the largest chunk of its revenue in the U.S., has benefited from a decline in the British pound that’s boosted its repatriated earnings.
Glaxo wants to bring its commercial team into discussions with the research and development group much earlier in the process as part of an effort to ensure better returns on investment and bigger launches of new products, Walmsley said. The company earlier this year announced it was hiring Luke Miels from AstraZeneca Plc to lead its global pharmaceutical unit.
The company expects to provide more detail in the second quarter on its early-stage cancer and immuno-inflammation assets, she said. “We still need to see over the next couple of years how that data plays out, but there are quite a few of them that we are excited about.”