GSK share price in focus as pharmco looks to replace chief executive

GlaxoSmithKline Plc (LON:GSK) is preparing to replace its chief executive Sir Andrew Witty next year, The Sunday Times has revealed. The news comes with some of the drugmaker’s biggest shareholders urging for a change at the blue-chip group whose performance has been impacted by generic competition to its flagship respiratory drug Advair.

GSK’s share price was little changed on Friday, adding 0.25 percent to close at 1,410.5p, underperforming the broader London market. The shares have lost about eight percent of their value over the past year.
The Sunday Times reported yesterday that GSK’s chairman Sir Philip Hampton had instructed headhunter Egon Zehnder to draw up a list of potential candidates, both internal and external, to replace the group’s chief executive. Sir Andrew Witty, who joined the FTSE 100 drugmaker 31 years ago as a trainee, is reportedly assisting the search for his replacement.

The two leading internal figures are believed to be Emma Walmsley, chief executive of the company’s consumer healthcare division, and Abbas Hussain, who is president of the global pharmaceuticals arm, while the most prominent external candidate is David Epstein, head of pharmaceuticals at rival Novartis. GSK, however, is also reportedly considering individuals outside the pharmaceuticals industry.
The move follows calls from some of GSK’s biggest investors for a break-up, with influential fund manager Neil Woodford arguing that the business should be split into separate companies, rather than run as a single £65-billion giant. Activist investor Och-Ziff Capital Management, which reportedly holds 0.5 percent in GSK via derivatives, meanwhile is said to have approached Sir Philip Hampton and urged him to shake up the board.
“If there’s to be a change, we want a best-in-breed management team,” a person close to the hedge fund told The Sunday Times.
As of 07:58 GMT, Monday, 29 February, GlaxoSmithKline plc share price is 1,410.50p.