GSK to search for blockbusters under new CEO Walmsley

This month marks the start of a new era for GlaxoSmithKline, with Emma Walmsley taking over from Sir Andrew Witty – and big pharma's first female CEO has said she is prepared to make tough decisions about the company's R&D strategy.

In her first comments with reporters since taking over on 1 April, Walmsley said the company will focus its R&D efforts on drugs that are most likely to acquire blockbuster status.

Walmsley told reporters after launching the company’s Q1 results: “We’d like to have probably fewer and more focused priorities, to have bigger launches.”

This could involve ditching some research programmes – as although GSK has launched new drugs in recent years, it has not produced anything that produces sales of the same magnitude as its ageing respiratory diseases blockbuster, Seretide/Advair, which hit a high of $8.3 billion in 2013.

Generics firms have struggled to copy Advair because of the added complication of producing a suitable inhaler, meaning it has remained unchallenged by cheaper copies even though its US patent expired back in 2010.

Although the FDA rejected Mylan’s generic Advair late last month, Hikma and Ventura are waiting to hear from the regulator by 10 May on whether their generic has been approved.

GSK has however benefited from the weak pound since last year’s Brexit vote as most of its sales are overseas.

Q1 results were slightly better than expected, although Advair is facing generic competition for the first time this year.

Sales and grew 19% to £7.38 billion, while earnings per share grew 31% to 25p. According to Thomson Reuters data, this beat analysts’ average forecast of £7.26 billion in sales and an EPS of 24.5p.

Should the generic hit the market this year, GSK said earnings will be flat, or decrease slightly.

Walmsley, who used to head the company's consumer unit, said GSK is considering acquisitions to improve its pipeline. The company will continue to “look externally” to improve its R&D prospects, she added.