Yahoo Finance GlaxoSmithKline raises outlook and appoints genetics expert to board
GlaxoSmithKline will add a leading scientist to its board and raised forecasts as Dame Emma Walmsley fends off activist investors who want to push her out of the job.
The FTSE 100 pharmaceutical giant now expected adjusted profits to fall between 2pc and 4pc for the year at constant exchange rates, down from a previous forecast in the mid-to-high single digits.
Shares rose slightly on the news on Wednesday. The stock is up more than 7pc in the last six months.
The company said forecasts did not take into account profits from Covid-19 treatments or vaccines.
It has yet to have a Covid vaccine on the market, although is expected to get approval soon for its jab with Sanofi.
GSK has secured a slew of deals for its Sotromivab treatment, including in the UK where the Government has bought 100,000 doses. It is yet to be approved by British regulators.
News of the increase to forecasts came as GSK revealed it will be adding Harry Dietz, a professor of genetics medicine at Johns Hopkins University, to its board in January.
Criticism has been mounting from activist investors over the leadership of GSK, which next year will be splitting off its consumer healthcare division, listing the majority of that business in London to allow it to focus purely on vaccines and pharmaceuticals.
Dame Emma will remain at the helm of that remaining business, with a new board established for the split-off consumer health arm.
However, this decision has come under fire from activist investors Elliott Management and Bluebell who have warned GSK needs more scientific names on its board.
The pair of activists have separately piled pressure on Dame Emma to reapply for her position as CEO of the remaining company, citing her lack of scientific experience.
GSK is one of the UK's two major pharmaceutical companies
Its move to add a top genetics professor to the board will be seen as a move to ward off the criticism. Dame Emma said the company already was "well above the median" for the sector even before the hire. "In fact, in terms of that expertise, we very much welcome diversity across the board."
Dame Emma addressed the pressure for GSK to kick off a recruitment process for the chief executive position at the pharmaceutical and vaccine business, saying: "Both in terms of my position and the board's position, that's been made extremely clear. There was a very deep and significant internal and external process run initially, and we are all extremely focused on the delivery of the plans we have."
Dame Emma is not alone in coming under fire from activist backers. Earlier this month, the chairman, Sir Jonathan Symonds, found himself in the crosshairs. He was urged to resign by Bluebell which said GSK needed a “more radical change agenda”.
Bluebell has also called for Glaxo to consider a sale of its consumer healthcare division instead of purusing a listing.
The updates came as GSK posted sales of £9.1bn for the three months to September 30, a 10pc rise on the prior year, boosted by a rebound in demand for its Shingrix vaccine for shingles.
