Turning the Glaxo supertanker
New Glaxo CEO Andrew Witty, 43, is embracing the concept wholeheartedly via a bold deal with South Africa’s Aspen that takes the world’s second biggest drugmaker into generics in emerging markets and a strategy to broaden out the group.
But how long will Glaxo’s not-so-patient shareholders have to wait to reap the rewards?
Witty gave a confident performance during a two-hour meeting with analysts this week, but a sliding share price the day after suggests investors see little to cheer about just yet.
Investing for diversity to de-risk the business may make sense, but bulking up in non-prescription healthcare products, vaccines, biotech and emerging markets will take time – as well as money, as evidenced by the decision to delay completion of the company’s 12 billion pounds buyback programme.
“You can’t turn a supertanker on a dime,” says Deutsche Bank analyst Brian Bourdot.