Glaxo chief wants broader group
GlaxoSmithKline's new chief executive plans to make the world's second largest drugmaker a broader business and give it a simplified structure, which will reduce its running costs.
Share Liverpool buy-back scheme assembles business teamLaying out his strategy formally for the first time on Wednesday, Andrew Witty declared his three priorities were diversification, smarter value-based drug research and a simplification of operating systems.
Money saved from the simpler group structure will be reinvested or returned to shareholders.
Witty unveiled his plans alongside a better-than-expected 13 percent rise in second-quarter earnings, as strong sales of vaccines and consumer products offset tough trading in pharmaceuticals.
But Europe's biggest drugmaker kept its full-year forecast for a mid-single-digit percentage decline in underlying EPS, dashing hopes it might raise its guidance.
At 12:20 p.m., Glaxo shares were down 3.1 percent at 1,186 pence.
Second-quarter sales rose 4 percent to 5.87 billion pounds. Earnings per share (EPS) rose faster, to 27.2 pence, helped by cost cutting and disposal gains. Analysts polled by Reuters Estimates had forecast EPS of 25p.
Glaxo also said it would extend the timeline for completion of its remaining 6.5 billion-pound share buyback programme beyond July 2009 to allow investment in strategic priorities.
Witty made emerging markets a top priority - a pledge backed up by a pioneering deal with South Africa's Aspen Pharmacare Holdings that paves the way for the sale of cheap branded generic medicines in emerging markets.
Witty's blueprint represents a shift in direction for a company that, like many of its peers, has focused in the past on developing blockbuster prescription drugs.
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