GlaxoSmithKline boss Emma Walmsley will defend the drugs giant’s strategy this week as she seeks to head off a raid by the ‘vulture lord’ of Wall Street.
The chief executive and her board are bracing for an assault after it emerged Paul Singer’s Elliott Management has taken a ‘multi-billion pound’ stake in GSK.
Elliott has remained silent about its intentions. But the hedge fund is notorious for using aggressive tactics to agitate for change.
Under pressure: Emma Walmsley is bracing for an assault after it emerged Paul Singer’s Elliott Management has taken a ‘multi-billion pound’ stake in GSK
Its move is said to have surprised Walmsley but she will try to get back on the front foot on Wednesday as she reports GSK’s first-quarter results.
The 51-year-old is expected to trumpet potential blockbuster drugs that the company is developing and give an update on the progress of the overhaul she launched after taking charge four years ago.
And ahead of the separation of GSK’s consumer arm next year, she will also face questions about the division’s future. Analysts have speculated Elliott could push for the separation to be speeded up or for the division to be sold to a rival such as Unilever rather than be listed separately.
Other observers say the hedge fund could demand more drastic changes, from the ousting of Walmsley to the breakup and sale of GSK’s pharmaceutical and vaccine businesses.
John Rountree, managing partner at pharma consultancy Novasecta, said Walmsley needs to assure investors that the ‘New GSK’ can stand on its own feet after losing the consumer business.
However, Walmsley is also set to ruffle feathers with plans to cut the dividend so she can spend more on research.
Rountree said: ‘Now we will see whether GSK’s investors really believe in its new high-risk, high-return strategy.’
Some investors have defended the chief executive and said Elliott should give her overhaul time to succeed.
Others suggested that Walmsley could be forced out over her intention to lead the biopharma-focused ‘New GSK’ – despite her lacking a science background.
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