GlaxoSmithKline has picked a familiar face to lead its consumer health business after a planned spinoff next year. Hint: It’s not group CEO Emma Walmsley.
Brian McNamara, currently head of GSK’s consumer healthcare division, will continue to serve as the franchise’s CEO after it breaks away from GSK in 2022, the British pharma said Thursday.
In picking McNamara for the over-the-counter unit, GSK is once again de facto standing behind Walmsley as the captain of the remaining pharma, which will stay focused on therapeutics and vaccines, despite pressure from Elliott Management to shuffle its top ranks.
McNamara joined GSK from Novartis in 2015 when the two companies combined their OTC portfolios into a joint venture managed by GSK. He became head of GSK consumer health in 2016, taking the baton from Walmsley as she moved up the command chain to CEO of the entire group. Novartis in 2018 backed out of the collab, and after taking full control of the venture, GSK formed a new JV with Pfizer in 2019.
Walmsley’s background in consumer health—and lack of prior experience in pharma—has reportedly been targeted by Elliott in the investment firm’s secret push for a new boss at GSK. Since it emerged as a shareholder of GSK in April, Elliott has reportedly been trying to gin up investor support to move Walmsley to the consumer health spinoff rather than to let her lead the new GSK after the separation.
Elliott made its intention for a C-suite overhaul clear in an open letter early July. The activist investor called on GSK to appoint a new board directors with biopharma and consumer health expertise to select the leaders for the two companies. Although Elliot said it wasn’t advocating a specific outcome but for a “robust” and “credible” selection process, it did say that the CEOs of the two companies “must have the skillsets and expertise to match their respective tasks at hand.”
GSK picked McNamara after six months of “extensive search and selection process,” GSK said in its announcement Thursday. It ran the quest with help from two headhunters and evaluated “several external and internal candidates,” it said.
“His strong track record of success and deep experience of fast-moving consumer goods and consumer health, proven at P&G, Novartis and GSK, means he is the right choice” to lead the consumer health unit as an independent company, GSK Chairman Jonanthan Symonds said of McNamara in the statement.
Symonds’ board has backed Walmsley’s leadership. In response to Elliott’s open attack earlier this month, the GSK board said it “strongly believes” Walmsley is the “right leader” for the company, citing “widespread and strong support” from GSK’s largest shareholders for Walmsley’s newly unveiled plan to improve the company’s performance.
During an investor event last month, Walmsley laid out her blueprint for the new GSK. It features a 5% average sales growth rate in the next five years, leading to total sales of £33 billion ($46 billion) by 2031.
As for the consumer health unit, GSK plans to demerge it by mid-2022, during which GSK will shed at least 80% of its 68% holding in the JV to shareholders. The business, home to popular brands such as arthritis gel Voltaren and vitamins line Centrum, generated over £10 billion in sales during 2020.
Besides McNamara’s hire, GSK said it’s expected to name a chair for the OTC firm later this year, who will then establish the board.