The new executive chair of GlaxoSmithKline came out in support of CEO Andrew Witty on Thursday, a day after Witty disclosed his strategy for bolstering the drug giant’s future.
“Andrew has the complete support of the board,” said Philip Hampton.
Hampton made the comment to reporters at GSK’s annual shareholder meeting. Some shareholders have called for Witty’s ouster as the company continues to struggle financially.
GSK is laying off hundreds of workers in RTP as part of a reorganization.
The comments were the first made by Hampton, who led the recovery of Royal Bank Scotland before accepting the leadership of the GSK board.
“Andrew has the complete support of the board. There are always shareholders who have points to make. But I certainly hope Andrew is here for a good while to come,” Hampton said, according to Reuters.
He said there was no “hard and fast rule” about how long chief executives should serve.
However, Hampton said he expected better performance from GSK.
“We haven’t kept up with some of the better-performing companies,” he said.
GSK also announced other board changes, including the addition of former Unilever executive Manvinder Singh (Vindi) Banga, and noted the board’s membership will include the following as of Sept. 1:
- Sir Philip Hampton Non-Executive Chairman
- Sir Andrew Witty Chief Executive Officer
- Mr Simon Dingemans Chief Financial Officer
- Dr Moncef Slaoui Chairman, Global Vaccines
- Professor Sir Roy Anderson Independent Non-Executive Director
- Mr Vindi Banga Independent Non-Executive Director
- Dr Stephanie Burns Independent Non-Executive Director
- Ms Stacey Cartwright Independent Non-Executive Director
- Ms Lynn Elsenhans Independent Non-Executive Director
- Ms Judy Lewent Independent Non-Executive Director
- Sir Deryck Maughan Senior Independent Non-Executive Director
- Dr Daniel Podolsky Independent Non-Executive Director
- Mr Hans Wijers Independent Non-Executive Director
- Mr Urs Rohner Independent Non-Executive Director
Reuters reported that Hampton “only joined GSK’s board after the company agreed a $20 billion plus asset swap with Novartis.”
On Thursday, he noted that he “likes the mix now.”
Witty’s new plan
Hampton also said he not think it was necessary for GSK to sell off its consumer health division.
On Wednesday, Witty said GSK would not spin off its majority holdings in a promising HIV drug developer.
The company also said it won’t return as much of the profits from its big deal with Novartis to shareholders.
Witty announced that GSK had canceled an initial public offering of its holding in the HIV business, ViiV Healthcare, opting instead to retain its full holding in the joint venture with equity partners Pfizer and Shiongi.
“We’ve made all of our decisions on the medium to long-run value creation – let’s not chase the quarter or even two years. There is an increase in optimism around the portfolio and with the increase in opportunity in R&D, we really think [an IPO] at this time would be a mistake,” he said, according to The Telegraph in London.
GSK owns some 80 percent of the joint venture.
Drugmakers have been trying to either grow or eliminate noncore investments to focus on their strengths amid pressure from generic drugmakers. Those deals included GSK’s sale of its cancer-drug business to Novartis in a swap for the Swiss company’s vaccines business and cash.
GSK also said it would reduce a planned return to shareholders from the Novartis deal. It will give shareholders 1 billion pounds ($1.5 billion) in a special dividend in the fourth quarter, a fourth of what was planned.
Transaction cost savings from the Novartis deal will be accelerated, with over 50 percent of total savings of 1 billion pounds expected in 2016, versus 2017. GSK said it has three major restructuring programs underway and expects to deliver 3 billion pounds annually annual cost savings.
GSK has faced in-house problems, including a bribery scandal in China. It is restructuring and is in a period of transformation, with the new chairman, Philip Hampton, taking charge.
The company reported sales of 5.6 billion pounds, a 1 percent increase from the same quarter in the previous year. Sales of Advair, which is used to prevent asthma attacks, continued to decline because of competition from generic competitors.