(Adds details, analyst reaction)
By Pushkala Aripaka and Ludwig Burger
April 28 (Reuters) - Plans for GlaxoSmithKline to
split in two are "well underway" it said on Wednesday after
exceeding first-quarter earnings forecasts as an easing of
COVID-19 curbs meant more clinic visits for critical treatments
such as HIV and routine shots.
GSK has fallen behind in the coronavirus vaccines race and
its broader strategy has been under the microscope after a
report that U.S. activist investor Elliott built up a
significant stake.
The British drugmaker said it would provide details on June
23 on its plan to separate next year into an over-the-counter
products business and another for prescription medicines and
vaccines.
Chief Executive Emma Walmsley said she was focused on GSK's
broader transformation and delivering shareholder value.
The separation was spearheaded by Walmsley, a former head of
GSK's consumer business, to simplify operations.
Walmsley took the top job in 2017 despite some investor
pressure to name an outsider as CEO and such calls may grow
with Elliott's arrival on the register.
"With major structural change on the cards at GSK, with or
without Elliott’s alternative vision, it looks set to be a year
of forced evolution at GSK," Steve Clayton, manager of
Hargreaves Lansdown's Select UK Income Shares fund, said in a
note.
GSK said that turnover for the three months to March fell
15% to 7.42 billion pounds ($10.28 billion) at constant currency
rates, while adjusted earnings stood at 22.9 pence per share,
down by a third.
Analysts had expected adjusted earnings of 21.9 pence per
share and sales of 7.83 billion pounds, a company-compiled
consensus https://www.gsk.com/en-gb/investors/analyst-consensus/analyst-consensus
of 17 analysts showed.
Walmsley launched GSK's split, which involves merging its
over-the-counter products business into a venture with Pfizer
and separating this from its prescription medicines and
vaccines units, last year.
Investments to prepare for the division have hurt earnings,
but GSK hopes the streamlined operations resulting from it will
pay off in the long term.
Walmsley said that while GSK's consumer health business had
great prospects and a "fantastic" leadership team, she would
seek to remain in control of the bigger picture.
"I’m very focused on leading GSK through that successful
separation and beyond," Walmsley told a results briefing, adding
that she saw her role as CEO as setting the strategy, hiring top
people and allocating capital, while leaving the medical science
to the experts.
"I've clearly laid 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 completes its planned split.
($1 = 0.7215 pounds)
(Reporting by Pushkala Aripaka in Bengaluru and Ludwig Burger
in Frankfurt; Writing by Alexander Smith; Editing by Keith Weir)
Glaxosmithkline (GSK)