Come Monday, GSK and consumer health unit Haleon will officially part ways, leaving the Big Pharma's biopharma and vaccines divisions to stand on their own. This will give the drugmaker—and its CEO Emma Walmsley—a chance to prove themselves after a long period of questioning from some market watchers and investors.
After the split, GSK aims to reach 33 billion pounds ($39 billion) in revenue by 2031 and deliver annual sales growth of 5% in the next five years. But how will it get there?
For one, GSK’s CEO Emma Walmsley is expected to look for M&A, Reuters reports. A possible target is SpringWorks Therapeutics, a $1.5 billion oncology treatment partner of GSK, according to the news service.
Meanwhile, GSK already has some growth drivers of its own. Its RSV vaccine was successful in late-stage testing, while its shingles vaccine, Shingrix, has been rebounding after a pandemic slowdown. In the first quarter of the year, Shingrix sales came in at 698 million pounds, more than double its haul from the same period last year.
While Walmsley has support and confidence from GSK’s board, activist investment group Elliot Management called for change last year, citing “years of under-management.” The group, which built a major stake in the company, rallied to remove Walmsley after the separation, saying she should head Haleon instead.
The company publicly replied that it had already added two new non-executive directors to the board ahead of the separation to “increase biopharmaceuticals and scientific experience.” It also opposed Elliot’s urge to split the pharmaceuticals department to allow the company’s “crown jewel,” its vaccine business, to be completely autonomous.
Meanwhile, Haleon is set to launch next week with more than 10 billion pounds in debt. GSK will get a 68% holding in Haleon, Reuters notes, but the company plans to sell down most of its stake. GSK has said it plans to sell Haleon shares "in a disciplined manner."
Without Haleon and its debt, the new GSK will be valued at around 86 billion pounds, Reuters reports. That's about 9 times earnings before interest, taxes, depreciation, and amortization, which is lower than some of the big pharma's peer companies, the news service notes.