Investment group renews calls for GSK to split
pharmafile | January 8, 2016 | News story | Medical Communications, Sales and Marketing | GSK, Neil Woodford, investment, restructure
Multi-million pound fund manager Neil Woodford has renewed his call for GSK to break up into separate business units, amid investor frustration over the company’s underwhelming share price.
The founder of Woodford Investment Management – an investor in GSK – says the $65 billion pharma giant would perform better after such radical restructuring, telling the BBC “the sum of the parts is worth more than the current share price.”
Woodford, who last month sold off his entire $230 million stake in Rolls Royce, told BBC Radio 5 Live’s Wake Up To Money programme that the complexity of the London-based drugmaker means it is “like four FTSE 100 companies bolted together,” and that it “does not do a particularly good job of managing all of the constituent parts.”
It is not the first time the 55-year-old has pressured GSK in this manner. In October he was reported as having told chairman Sir Phillip Hampton the company should consider separating its HIV business ViiV Healthcare and its dermatology arm Stiefel, from its core medicines and vaccines business, and consider selling its consumer healthcare division.
In November, he told an investor conference that his personal investment in the drugmaker had been a disappointment for a long time.
Woodford said: “We’d like the business to recognise that it should focus on certain activities in the portfolio and do them better than they have done in the past, demerge the bits they haven’t managed particularly well and let other people who specialise in those activities run those businesses.”
The comments come ahead of GSK chief executive Sir Andrew Witty’s presentation at the JPMorgan Healthcare Conference in San Francisco next week, in which he will attempt to boost investor confidence in a company that has seen share prices fall since the beginning of 2014, amidst falling sales in its bestselling Advair asthma medication.
Witty is expected to claim that growth in new drugs – particularly HIV treatments – is producing a recovery. In November, the chief executive said it plans to launch 20 new drugs by 2020 and deliver fresh growth. The company is due to announce Q4 and full-year results for 2015 on 3 February.
Joel Levy
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