GlaxoSmithKline Appoints Big Pharma´s First Woman Chief Executive

GlaxoSmithKline appointed Emma Walmsley, the head of its consumer business, to become its next chief executive. She is the first woman to run a major pharmaceutical giant.

Walmsley will join the board on January 1, and take command in March. She succeeds Sir Andrew Witty, who spent eight years cleaning up messes involving Glaxo’s past bad behavior and re-focusing the drug giant on businesses beyond inventing drugs, including consumer healthcare and vaccines. He took numerous actions to make the company more ethical, posting all of its clinical trial results online and stopping the practice of paying doctors to give promotional speeches about drugs, but Glaxo’s stock price lagged most of its peers over his tenure. Witty was the subject of a profile in the most recent issue of FORBES.

For Walmsley, the biggest challenge will be getting GlaxoSmithKline’s core pharmaceutical business to deliver. GSK got more drugs approved (13) during Witty’s tenure than any other pharmaceutical company other than Johnson & Johnson, according to the InnoThink Center for Research in Biomedical Innovation. But they have mostly failed to deliver, sales-wise. Some new products, like Shingrix, a vaccine for shingles, and Nucala, a drug for severe asthma, are showing promise, but many investors want Glaxo to look outside its walls for new products.

Walmsley will also have to contend with potential sales declines of the asthma drug Advair. In 2013, Advair generated more than $4 billion, but sales have already fallen 30% as U.S. insurers have switched to other products and managed to negotiate lower prices. Next year the first generic competitor should emerge in the U.S. As more generics are approved, analysts at Jefferies estimate, sales will fall by 90% by 2020. Walmsley will have to look at taking steps–up to and including Glaxo launching its own generic–to slow that decline.

In sharp contrast with most pharmaceutical chief executives, Walmsley has little experience with the R&D side of the business. Before joining GSK in 2010, she served in various executive posts at L’Oreal, most recently as general manager of consumer products for China. It’s not unprecedented for a pharma chief executive to come from outside the drug business: Joseph Jimenez, the chief executive of Novartis, previously worked at Heinz. But Jimenez ran Novartis’ drug marketing business; Walmsley has not previously run a pharmaceutical business.