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* CEO says focused on seeing split through, big picture
* COVID-19 pandemic still taking toll on overall business
* GSK expects recovery in vaccine sales in H2
* Shares marginally higher following Q1 results release
(Adds details on sales, analyst comment)
By Pushkala Aripaka and Ludwig Burger
April 28 (Reuters) - Plans for GSK to split in two are "well
underway" it said on Wednesday, as a cost clampdown and rising
clinic visits for critical treatments after an easing of
COVID-19 curbs helped it land better-than-forecast first-quarter
earnings.
GSK, which trails competitors in the coronavirus
vaccines race, is under the microscope after a report that U.S.
activist investor Elliott built up a significant stake.
The British drugmaker said it would give details on June 23
on its plan to separate next year into an over-the-counter
business and another for prescription drugs and vaccines.
Chief Executive Emma Walmsley said she was focused on GSK's
broader transformation, adding that while GSK's consumer health
business had great prospects and a "fantastic" leadership team,
she would focus on the bigger picture.
Walmsley, a former head of GSK's consumer business, became
CEO in 2017 despite some investor pressure to name an outsider
and such calls may grow with Elliott's arrival on the register.
"I'm very focused on leading GSK through that successful
separation and beyond," Walmsley told journalists without naming
the activist fund, adding that she saw her role as CEO as
setting strategy, hiring top people and allocating capital,
while leaving the medical science to the experts.
R&D LEADERSHIP
"I've clearly laid (strategy) out from day one ... and
included in that has been the best possible R&D leadership in
the world," Walmsley said in response to suggestions that her
lack of scientific background meant she would be better suited
to lead the consumer business once GSK splits in two.
Preparations have hurt earnings, but GSK hopes the
streamlining of operations will pay off in the long term.
"With or without Elliott's alternative vision, it looks set
to be a year of forced evolution at GSK," said Steve Clayton,
manager of Hargreaves Lansdown's Select UK Income Shares fund.
GSK said that turnover for the quarter to March fell 15% to
7.42 billion pounds ($10.28 billion) at constant currency rates,
as the year-earlier period was inflated by people stocking up on
medicines because of the pandemic.
In addition, sales of cold and flu remedies like Theraflu or
Robitussin fell because social distancing prevented infections,
mirroring the experience at Sanofi and Novartis
.
Adjusted earnings were 22.9 pence per share, down by a
third, compared to analysts' expectation https://www.gsk.com/en-gb/investors/analyst-consensus/analyst-consensus
of 21.9 pence per share on sales of 7.83 billion pounds.
"GSK endured a pretty lacklustre 2020 ... Worryingly, their
2021 performance looks all too familiar," Third Bridge analyst
Sebastian Skeet said in a note after it stuck to its forecast of
a mid-to-high single digit fall in earnings this year.
However, GSK expects its vaccines division to recover in the
second half, as healthcare systems and consumer trends "approach
normality."
($1 = 0.7215 pounds)
(Reporting by Pushkala Aripaka in Bengaluru and Ludwig Burger
in Frankfurt; Editing by Keith Weir and Alexander Smith)
