GlaxoSmithKline CEO Sir Andrew Witty to Step Down in 2017
Published: Mar 17, 2016
March 17, 2016
By Alex Keown, BioSpace.com Breaking News Staff
LONDON –Sir Andrew Witty will step down from his decade-long position as chief executive officer of GlaxoSmithKline next year, the company announced this morning.
Witty’s last day helming the company will be March 31, 2017. His announced retirement ends speculation about his tenure following calls for his resignation by some investors earlier this year.
“By next year, I will have been CEO for nearly ten years and I believe this will be the right time for a new leader to take over,” Witty said in a statement.
Witty, who has worked at Glaxo for decades, said he wanted to give the board of directors enough notice of his plans in order to select a new CEO who will help “sustain the momentum of our current business performance.”
GSK board chairman Philip Hampton said the company will begin a formal process to find Witty’s successor. Bloomberg reported both internal and external candidates will be considered for Witty’s role. Likely candidates for the job include Emma Walmsley, head of Glaxo’s consumer-health division, and Abbas Hussain, president of its drug business. Another potential successor is Simon Dingemans, Glaxo’s chief financial officer. In a recent interview with the Economic Times, Dingemans praised the strategic vision Witty laid out for the company when he took over the helm in 2008.
“We feel very good about the shift in the mix of the company to give it more balance and more opportunities to grow with a renewed pipeline. These don't happen overnight and some of these things go towards negative before the positives appear. From last year we have been in good shape and we see a lot of those momentum drivers beginning to appear,” Dingemans said.
Calls for Witty to be replaced came from some of the company’s largest shareholders, including Neil Woodford, a top 20 stockholder. Witty joined GlaxoSmithKline in 1985 and became CEO in 2008 following the retirement of Jean-Pierre Garnier. Since he took over the helm of the GSK, sales and earnings have dropped 6 percent and 9 percent respectively, Forbes reported in May. The company has also been rocked by a few scandals. In 2012, GlaxoSmithKline agreed to plead guilty and to pay $3 billion to resolve its criminal and civil liability arising from the company’s unlawful promotion of certain prescription drugs, its failure to report certain safety data, and its civil liability for alleged false price reporting practices. The resolution is the largest health care fraud settlement in U.S. history and the largest payment ever by a drug company. GlaxoSmithKline was fined nearly $500 million by the Chinese government when it was revealed that some employees of the pharmaceutical company were bribing doctors with extravagant gifts to prescribe Glaxo medications to their patients. Additionally the company was also accused of violating China’s personal privacy laws through illegal videotaping. Last year, Glaxo faced allegations sales reps in Syria bribed doctors and officials to boost sales of its medicines.
In addition to overcoming damage from the bribery allegations, GlaxoSmithKline is also striving to overcome lagging sales. Although the company reported a 5 percent growth in emerging markets in 2015, sales in Europe were flat and in the U.S. sales were down about 10 percent as the result of formulary and contract changes to asthma drug Advair. Glaxo is under pressure to develop new drugs that aren’t threatened by generics. There is hope that the company’s newer COPD inhaler Breo will spark a revenue turnaround. A turnaround could also be sparked due to a three-part deal with Novartis AG .