Last checked at 
* New CEO is consumer brands specialist
* Appointment seen as backing diversification strategy
* Walmsley stresses importance of developing new drugs
By Ben Hirschler
LONDON, Sept 20 (Reuters) - Emma Walmsley, GlaxoSmithKline's incoming CEO, breaks the mould as the first woman tolead a top global drugmaker and stands out among Big Pharmabosses as a consumer brands guru rather than a prescriptionmedicines expert.
But after six years at Britain's biggest drugmaker she is aconfirmed GSK insider, which will disappoint those investors whohad been hoping for a new broom from outside the company.
"GSK will get applause for appointing a woman to a positionno woman has filled but investors will be wary that the companywill do more of what hasn't worked all that well," said ErikGordon of the University of Michigan's Ross School of Business.
GSK has struggled to grow sales and profits in recent years,although it is finally on the road back to double-digitpercentage earnings growth in 2016.
The former classics and modern languages graduate fromOxford, who worked in marketing and management at Frenchcosmetics group L'Oreal for 17 years before joiningGSK, has her roots a long way from the pharmaceutical lab bench.
Nonetheless, as head of consumer healthcare at GSK, the47-year-old mother of four has quietly built up her reputationamong investors by doubling margins in her division and focusingon "power brands" such as Sensodyne toothpaste and painkillerPanadol.
Walmsley's appointment suggests GSK will continue thediversified strategy pioneered by outgoing CEO Andrew Witty, theman who brought her onboard after meeting her over lunch whileshe was running L'Oreal's business in Shanghai.
That may be reassuring for shareholders who relish GSK'snear 5 percent dividend yield and had worried that a radicalchange of direction, accompanied by big acquisitions, could putpayouts at risk.
But Witty's high-volume, lower-price approach is at oddswith the thinking of many other drugmakers that have targetedexpensive new treatments for serious diseases like cancer.
The market, so far, has rewarded greater focus overGSK-style diversification, although the pendulum may yet swingback, especially with sky-high prescription drug prices nowunder intense scrutiny in the key U.S. market.
NOVARTIS DEAL
Walmsley, who was born in Barrow-in-Furness in northernEngland and grew up in Kent, is a confident, smooth communicatorwho describes herself as extremely competitive -- a streak thathas served her well in both the beauty industry and at GSK.
For investors, a key question now is how she will approachthe big decisions facing GSK's pharmaceuticals business, whichremains the core driver of operations.
At first glance, her lack of experience may be worrying.However, being effectively an "inside-outsider", she could bringa fresh and more commercially astute perspective to investmentdecisions, according to Brian McGee, a pharma sector strategyspecialist at consultancy Novasecta.
Certainly, Walmsley is quick to stress that finding newdrugs remains central to GSK's mission.
"Obviously, R&D is the beating heart of our company and oursuccess is and will continue to be defined most fundamentally bythe strength of our pipeline," she said in an in-house videorecorded to mark her appointment.
"The number one priority focus for me over coming months andyears is going to be really making sure we are investingappropriately and strongly in our R&D organisation."
Being a scientist is certainly not a prerequisite forrunning a drug company. Plenty are run by lawyers andaccountants. Indeed, some investors are wary of science-obsessedpharma bosses who can lose sight of the bottom line.
Walmsley may take comfort from the example of her Swissrivals.
Roche boss Severin Schwan also stood out when hebecame CEO of the world's biggest cancer drug company in 2008for having previously only worked in finance and diagnostics.
Novartis CEO Joe Jimenez, meanwhile, was a formerconsumer goods executive at Heinz, although he did run Novartis'pharma division before taking on the top job in Basel.
Jimenez is, in fact, likely to be one of the people outsideGSK that Walmsley works with most closely after she takes up herpost at the end of March next year.
GSK and Novartis currently have a joint venture for consumerhealth and many analysts expect the British firm to acquire theSwiss group's 36.5 percent stake, perhaps for around $9 billion.Novartis has an option to sell its holding to GSK in 2018 butsome think Walmsley and Jimenez could agree a deal before then. ($1 = 0.7713 pounds)
(Reporting by Ben Hirschler; Editing by Keith Weir)
