February 6, 2017
By Alex Keown, BioSpace.com Breaking News Staff
LONDON – Although she has not yet assumed the reins of GlaxoSmithKline , incoming Chief Executive Officer Emma Walmsley will face her first test with investors this week when the company unveils its projected earnings for 2017.
Walmsley will not take part in the call, but she has been heavily involved in the company projection, Reuters reported this morning. Part of that projection will include how the company handles the potential challenge of a generic for its blockbuster asthma drug Advair. Later this spring, the U.S. Food and Drug Administration is expected to rule on Mylan ’s fluticasone propionate inhaler, a generic equivalent of Advair—a drug that has raked in more than $1 billion annually since 2001, according to Reuters. The FDA’s ruling on Mylan’s drug on March 28 comes four days before Walmsley takes over GSK. If the generic is approved, Reuters said Walmsley will have to focus on bolstering sales from newer respiratory drugs, such as Breo, Anoro, Incruse and Nucala.
In a wide-ranging analysis, Reuters outlined some of the hurdles facing Walmsley, who was tapped to take over for the retiring Sir Andrew Witty. Some of those challenges include the Advair issue and relatively weak pharma growth, Reuters said. However, Reuters noted that Witty’s leadership has placed the company in a comfortable position to weather the slower growth due to its “high-volume and lower margin strategy.” GSK’s consumer health business, which has been helmed by Walmsley for the past six years, has also contributed to the company’s stability, Reuters’ analysis shows. During her time heading the consumer health business, GSK diversified into higher volume consumer staples like toothpaste and headache medications that have lower margins.
Citing a Goldman Sachs analysis, Reuters said Walmsley will be poised to increase GSK’s “scope of acquisitions” as part of the company’s growth. What business or therapeutic area GSK may target for acquisition under Walmsley was not mentioned.
The company is poised to see growth in its pipeline during Walmsley’s tenure. Reuters said the company expects to reveal data from about 25 clinical trials over the next 18 to 24 months. Witty said if there is “a substantial yield of good news” from the trial results, the company will have to invest more in its R&D efforts.
Since she was tapped in September, she has been assembling a team to help guide the company. Last month, GSK hired Luke Miels, a former AstraZeneca executive, to head GSK’s pharmaceuticals division. Miels will replace Abbas Hussain, who is departing the company.
With Miels and head of research Patrick Vallance, Walmsley will be able to shape the future of the company’s pharmaceutical business, which could include carving out new space in the HIV market. In late December, GSK data showed that a combination of GSK’s HIV drug Tivicay combined with a Johnson & Johnson compound was highly effective. Some analysts believe GSK’s combination could slice off some of the market share currently enjoyed by Gilead Sciences .
