Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Investor Elliott wants GSK leadership settled before split

Stock MarketsJul 01, 2021 07:40AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Company logo of pharmaceutical company GlaxoSmithKline is seen at their Stevenage facility, Britain October 26, 2020. REUTERS/Matthew Childs/File Photo 2/2

By Keith Weir

LONDON (Reuters) -Activist investor Elliott said GlaxoSmithKline (NYSE:GSK) should review its leadership and consider a sale of its consumer healthcare business as it confirmed on Thursday that it had taken a significant stake in the British pharmaceuticals group.

GSK last week set out plans for a separate listing next year of the consumer health business, which includes brands such as Sensodyne toothpaste and Advil painkillers, in the biggest shake-up for the company in two decades.

In a strongly worded letter to the GSK board, setting out five recommendations to tackle what it called years of underperformance, Elliott raised the pressure on Chief Executive Emma Walmsley while endorsing the planned split.

The hedge fund said GSK should add pharmaceutical and scientific expertise to its board and then decide who should run the two businesses, looking at internal and external candidates.

"Elliott strongly believes that the future CEOs of New GSK and CH must have the skillsets and expertise to match their respective tasks at hand," adding that existing management should remain in place for now.

Elliott's response had been awaited after reports in April that it had taken a multi-billion pound stake.

"Despite possessing strong businesses in attractive markets, GSK has failed to capture business opportunities due to years of under-management," Elliott said.

SEPARATION PLANNED

In its initial response, GSK said Elliott was raising "legacy issues".

GSK's "ambitious" plan was set out to realise significant value over the next decade, a spokesperson for the British company said.

"We believe our shareholders are supportive of this strategy, and that they are focused on GSK executing on it without distraction or delay. This is our clear priority," they added, saying a more detailed response would follow.

The split will allow GSK to focus on its core drugs and vaccines business, which has been hit by a lack of fast-growing products and patients deferring treatments due to the COVID-19 pandemic, weighing on its shares.

Walmsley, who has led GSK since 2017, said last week that GSK shares had underperformed for a long period and that she planned to stay on to lead the pharma and vaccines business.

The shares were up around 0.7% on Thursday.

"Our analysis suggests that GSK has an opportunity to generate up to 45% upside in its share price in the lead-up to its full separation, and much more in the years beyond," Elliott said.

It also urged GSK to look at a full sale of the consumer health business, a joint venture with Pfizer (NYSE:PFE), should the opportunity arise and grant the vaccines business more autonomy within new GSK.

"Providing vaccines more autonomy could increase its talent retention and nimbleness ... maintaining separate divisional reporting for vaccines will allow investors to appropriately value GSK's crown jewel vaccines business," Elliott said.

Investor Elliott wants GSK leadership settled before split
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Jose Maderno
Jose Maderno Jul 01, 2021 7:34AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Anyone with a stake in GSK should absolutely take the time to listen to the audio on earnings calls that are available on the company website.  In my opinion, management (or lack thereof) is the number one issue facing this company.  In its current state, the vaccine business faces a real risk of becoming irrelevant.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email