ALEX BRUMMER: Emma Walmsley’s high wire act at GSK

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ALEX BRUMMER: Emma Walmsley’s high wire act at GSK

As a pure life sciences group, there is much more visibility for GlaxoSmithKline’s (GSK) drugs pipeline. As strongly as it performed last year, the ma

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As a pure life sciences group, there is much more visibility for GlaxoSmithKline’s (GSK) drugs pipeline. As strongly as it performed last year, the market is still unconvinced about the future.

No one doubts GSK’s strengths in developing vaccines, in HIV and respiratory treatments. In spite of some strategic acquisitions, it still lacks heft in oncology.

Nothing is likely to raise the hackles at GSK more than comparisons with its British competitor AstraZeneca.

Yet GSK’s stock market valuation of a relatively modest £58.4billion compares unfavourably with £159billion for Astra, which is on a roll with immunology treatments for cancer.

In the face of activist interventions, chief executive Emma Walmsley stuck to her guns on the pace of change and completed a complex split which saw consumer healthcare arm Haleon, maker of Sensodyne, and Panadol, floated as a separate company.

Under pressure: In the face of activist interventions, GSK chief exec Emma Walmsley stuck to her guns on the pace of change and split healthcare arm Haleon off as a separate company

Under pressure: In the face of activist interventions, GSK chief exec Emma Walmsley stuck to her guns on the pace of change and split healthcare arm Haleon off as a separate company

Under pressure: In the face of activist interventions, GSK chief exec Emma Walmsley stuck to her guns on the pace of change and split healthcare arm Haleon off as a separate company

That may temporarily have silenced critics but as a relatively small life sciences company, one cannot but feel that GSK is vulnerable in a sector in which Covid vaccines proved a licence to print money.

The concern is that this vital part of Britain’s scientific and R&D infrastructure could fal into unfriendly hands.

What cannot be disputed is that recent performance has been impressive. Shingles vaccine Shingrix is a big winner, with £3billion of sales in 2022.

It has benefited from pent-up demand, which built up in the pandemic. The great hope for the future is progress on curing the respiratory RSV virus. Pneumonia has long been the bane of the elderly.

Most of us will have friends and relatives who have suffered with chest infections and worse, with fatal consequences this winter.

Being smaller than rivals means that GSK can grow faster. Walmsley has set some exacting sales targets of 5 per cent-plus a year through to 2026.

It is easy to dismiss such ambition but if it drives the effort to conquer the respiratory space, where it has a head start, no one will complain.

There also is potential for oncology pioneer Tesaro, bought in 2019, to pay off. Taking treatments from the lab through regulatory approvals to the market is a laborious process. Investors need to show patience.

Absent minded

The chair of the Commons Treasury committee, Harriett Baldwin, is not a person to be trifled with.

Last month she went to war with the International Monetary Fund over its refusal to provide a witness to its probe into the market meltdown caused by Trussonomics. 

Her committee is now being snubbed by NatWest chief Alison Rose, who has declined to appear at a hearing.

High street banks are expected to get a deserved ear-bashing for failing to pass on at least some benefits of higher interest rates. Rose says she is ‘too busy’.

The proposed date of testimony would be around the time of NatWest’s annual results. The preparation time for presentations is considerable and one can understand her reluctance to interrupt work ahead of one of the biggest days of the financial year.

Yet Rose has a special responsibility to Parliament, given that 46 per cent of the shares in the bank are still technically controlled by the taxpayer.

Rose has sought to demonstrate genuine social responsibility. Among other things she has turned Fred Goodwin’s vanity headquarters at Gogarburn into a food bank and reception centre for Ukrainian refugees.

As real incomes have come under pressure she has focused on assisting struggling customers. Rose may have personal reasons for not attending.

More likely, she may not have relished the thought of a televised Star Chamber.

NatWest and its peers have had a profitable year. But it has also been one of branch closures, widening interest margins at the expense of customers and big dividend payouts.

All too difficult.

Dark side

Under-FIRE cyber security specialist Darktrace has defended itself against allegations of corporate skulduggery.

It rejects the claims, saying they pre-date its London flotation, and explains controls have been put in place.

Full details are on its website. That’s fine except for much of the day, the link on the website was down.

Not quite a message that will have inspired clients or investors.

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