Chief GSK breakup advocate Woodford, tired of being 'ignored,' pulls out

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U.K. investor Neil Woodford has been agitating for a GlaxoSmithKline breakup since late 2015.

After years of clamoring for a companywide breakup, leading GlaxoSmithKline agitator and investor Neil Woodford is walking away.

In a blog post cheekily titled “Glaxit,” the well-known U.K. investor announced the end of his long Glaxo holding, declaring that while “some investors remain hopeful,” he is now “less optimistic” in the company’s prospects.

The reason? Potential forthcoming Gilead competition to ViiV, GSK’s HIV unit, Woodford says. If successful in the clinic, Gilead’s wannabe rival to fast-grower Triumeq “could undermine Glaxo’s hitherto robust market position,” he wrote, jeopardizing the “one Glaxo engine that has been firing on all cylinders.”

He also expects GSK to cut its dividend, a move he says he could have tolerated as a consequence of the company following his split-up advice. But since it hasn’t, “my base assumption now … is that Glaxo remains a healthcare conglomerate with a sub-optimal business strategy,” he wrote, adding that “these characteristics do not appeal to me as an investor.”

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Woodford turned up the heat on the company back in October 2015, advocating for a four-way split that would divide the company’s prescription drugs and vaccines; ViiV; Glaxo’s market-leading OTC joint venture; and dermatology business Stiefel.

Management certainly felt the pressure, with then-CEO Andrew Witty announcing six months later that he’d be stepping down. But the company continued to stand by its stick-together strategy, insisting that its units needed one another to perform optimally—and that it wasn’t the right time for major shifts.

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More recently, Witty successor Emma Walmsley has made it clear that she feels similarly, though she’s left open the possibility for changes in the future.

“It’s something we should continue to review, hopefully not every quarter, but on a reasonably regular basis,” she said on Glaxo’s first-quarter conference call.

Woodford, though, lamented the baton-passing as proof that he’d continue to be “ignored.”

“Even before taking her seat she has been keen to portray herself as a ‘continuity candidate’ and the prospect of a Glaxo breakup now looks more remote than ever,” he wrote.

If Woodford’s recent track record is any indication, though, Glaxo and its other investors shouldn’t necessarily be worried by his dismissal. 2016 was a tough one for his trust, with investing missteps involving Northwest Biotherapeutics and Circassia denting its reputation.

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On top of that, with ViiV, some industry watchers think Glaxo’s the one primed to steal HIV market share from Gilead. The British drugmaker is gambling with a two-drug regimen—containing its already marketed Tivicay—that could potentially cut down on the side-effect burden and costs born by users of Gilead’s three-drug cocktails. And in December, GSK announced phase 3 data that so far affirmed its approach.