43ILLUSTRATION BY ALEXIS BEAUCLAIR. DATA: COMPILED BY BLOOMBERG
THE BOTTOM LINE Since taking over Glaxo in 2017, Big Pharma’s first
female boss has shaken up the British drugmaker—with some promising
results. Shareholders, however, have yet to respond positively.WhileWalmsleyhas signaled interest in more transac-
tionssincetheTesaro purchase and a partnership struck
in FebruarywithMerck KGaA, she questions the logic of
hugedeals.“Companies can die of indigestion just as eas-
ilyastheycandie of starvation,” she says. “I’m not com-
pletelyconvinced that scale is a huge advantage.”
Walmsleywasn’t the obvious choice to lead the drug-
makerintothenextfrontieroftherapiestofightcancer
andotherdiseases.After 17 years at cosmetics com-
panyL’OréalSA,she moved in 2010 to Glaxo’s consumer
unit,hometobrands including Tums and Nicorette. That
experienceledsome investors to incorrectly assume she
wouldhangonto that business.
TheOxford-educated CEO is relying on a new team
ofhigh-profilespecialists to help carry out her plans.
ShehiredHalBarron, a drug hunter with close ties to the
Californiabiotechsector,asheadofresearchandpoached
LukeMielsfromAstratorunthepharmadivision.“What
hassurprisedmeis howmuchimpactchangingevena few
peoplecanhave,”Walmsleysays,addingthathermission
is toachievea “cultureshift.”Oftheroughly 100 manage-
mentchangesshe’smade,about 1 in3 newleaderscomes
fromoutsideGlaxo.
Walmsleyhaseagerlysought
experts’opinionsandturnedher
lackofpharmaexperienceintoan
advantage,saysLaurieGlimcher,a
GlaxoboardmemberandCEOof
theHarvard-affiliatedDana-Farber
CancerInstitute.“Comingfromthe
outsidetoa freshareais some-
timesthebestthingyoucando.”
Ultimately, Walmsley willbe
judged on whether shebrings
Glaxo backintothetoptierof
R&Dperformers.The company
haslauncheda shinglesvaccine
thatquicklyachieved$1billion in
annual sales, rolled out HIV treatments, and moved ahead
with three oncology drugs it hopes will be available in 2020.
Glaxo in May revamped the way it pays sales reps to bet-
ter reward individual efforts, reversing a policy introduced
several years ago following allegations that it improperly
promoted some of its products.
With a slimmer but sharper stable of drugs, patience
is required. “Her biggest challenge is time,” says Darrell
Baker, the former head of Glaxo’s respiratory business
who left in 2015. “It’s like a rosebush in the winter. After
the pruning stage, you have to wait to see how much it’s
going to blossom.” �James PatonSeeking to catch rivals in the race to produce
blockbusterdrugs—andsilencecriticswhoseeGlaxo
asa lumberinggiant—BigPharma’sfirstfemaleCEOis
engineeringa radicalshake-up,takinga differentpath
thanBristol-MyersSquibb,TakedaPharmaceutical,and
AbbVie,whicharereinventingthemselveswithmegadeals.
Walmsleyhasreplacedabout 100 ofhertop 125 man-
agerssinceshetookoverin2017.Shehasn’tstopped
there—almosta thirdoftheexperimentaldrugsin Glaxo’s
pipelinearegone,aswellas3,800employees. And she’s
revealed plans to separate Glaxo’s consumer-health busi-
ness through a joint venture with Pfizer Inc. that combines
products ranging from Sensodyne toothpaste to Advil.
Glaxo’s path has resembled those of European compa-
nies like Volkswagen AG and Nestlé SA, corporate titans
that have found themselves vulnerable to disruption from
new technologies and market shifts. The largest pharma
companies are grappling with ballooning development
costs, mounting pushback on prices, and daunting odds—
studies suggest more than 90% of potential drugs fail to
make it through human testing to the market.
Before Walmsley settled into the role, Glaxo had pulled
back in cancer treatment, whiffing on a wave of therapies
that have revolutionized the field and led to top-selling
products for competitors. Now she’s rebuilding Glaxo’s
position in oncology to revitalize its list of drug candidates.
Still,thecompany’sstockhasbarelymovedsince
April2017, reflecting investors’ lack of enthusiasm for
Glaxo’s new direction. Shares of British rival AstraZeneca
Plc have surged about 30% over the same period. “What
understandably people want to see is evidence of a future
pipeline that’s going to drive growth,” Walmsley says.
Her strategy has revolved around focusing on fewer,
but potentially more lucrative, opportunities rather than
massivetakeovers,suchasAbbVie’sagreementin June
tobuyAllerganfor$63billion,Bristol’s$74billiondeal
for Celgene, and Takeda’s $62billion acquisition of Shire.£174/2017 7/20191315Glaxo’s stock price◼ SOLUTIONS Bloomberg Businessweek July 22, 2019