The new boss is quickly shaking up the three-century old pharma firm.
EMMA WALMSLEY was just six weeks into her tenure as CEO of GlaxoSmithKline, the $38.9 billion British pharmaceutical firm, when “Glaxit” happened.
Glaxit was not a world-shaking geopolitical tremor à la Brexit, but for GSK it may have seemed hardly less significant. Neil Woodford, the much celebrated British fund manager—who had gained fame for coming out of the dotcom crash and the global financial crisis unscathed, and one of GSK’s largest shareholders—announced he was quitting the company. In a blistering 958-word critique—published on May 12, 2017, and garnering coverage from Reuters to the Telegraph—Woodford explained why, after 15 years, he was pulling every last pence out of GSK stock.
Those 15 years had been “frustrating” for him; GSK had remained throughout, he charged, “a health care conglomerate with a suboptimal business strategy.”
Woodford had long been one of GSK’s most vocal critics; for years he had clamored for it to break up into its constituent businesses. (The company has pharmaceutical, vaccine, and consumer health divisions.) He argued the gambit, fashionable in Big Pharma these days, would unlock shareholder value through more focused stand-alone companies. GSK’s leaders—most recently former CEO Sir Andrew Witty—had consistently rejected the idea, contending that the firm’s conglomerate structure provided stability and some synergies.
But the last straw for Woodford seemed to be Walmsley. Of the company’s new chief executive, he wrote, “Even before taking her seat she has been keen to portray herself as a ‘continuity candidate.’” In other words, more of the same.
Walmsley may not be ready to ditch GSK’s conglomerate structure, but in almost every other way, Woodford’s description couldn’t be more wrong.
To begin with, there’s who she is. Neither a man nor a scientist, Walmsley is something of an outsider in pharmaland. She’s the only woman to run one of the large innovative drugmakers, and her path was hardly a typical one. A marketing whiz who spent 17 years at L’Oréal, Walmsley joined GSK in 2010 and started running the company’s consumer health care business the following year.
Then, there’s what she’s done. Since taking charge in April 2017, Walmsley, No. 1 on Fortune’s International Power 50 list, has made swift and radical changes. Within months, she had replaced 40% of her top managers and pulled the plug on 30 drug development programs and 130 brands. She announced plans to stop selling Tanzeum, a diabetes drug for which GSK had won FDA approval only three years prior.
Within a year, she sold off the rare-disease unit and initiated a strategic review of the company’s cephalosporins antibiotic business. She assembled a roster of all-star talent to fill out her executive team, and in July she did a $300 million deal with 23andMe, the data-rich direct-to-consumer genetic testing company. She instituted new (and unheard of, at GSK) levels of organizational hygiene—implementing uniform key performance indicators, employee standards, and strategies across GSK’s three businesses. As Walmsley told Fortune in June: “The way I define the job is, firstly, in setting strategy for the company, and then leading the allocation of capital to that strategy—because until you put the money where you say your strategy is, it’s not your strategy.” For the new boss, that means a new commitment to R&D.
She has also embarked on a cultural overhaul: Meetings get straight to the point and often begin with the question, “What are we here for?” In her first interview as CEO, she told the Financial Times, a bit clumsily, that GSK scientists would no longer be “drifting off in hobbyland” under her watch.
Walmsley is the fresh face of discipline and rigor at GSK. When asked how her communication style compared with that of her predecessor Witty, a senior leader who recently left the company chuckled before responding they couldn’t be more different.
Continue onto Fortune to read the complete article.