GlaxoSmithKline investor Neil Woodford is urging a break-up of the drugmaker to drive shareholder value, Sky News reported. According to people close to the matter, Woodford has held private talks with GlaxoSmithKline chairman Philip Hampton regarding the matter.
Sky News suggested that a further meeting between Hampton and Woodford has been scheduled to discuss a split, which could see the separation of GlaxoSmithKline's ViiV Healthcare business, consumer healthcare division Stiefel and its dermatology unit from its core medicines and vaccines arm. In May, GlaxoSmithKline said that it would retain its existing holding in ViiV, scrapping plans to spin-out the unit, which is a joint venture with Pfizer and Shionogi.
GlaxoSmithKline CEO Andrew Witty recently said that innovation is the best defence against pricing pressure faced by the pharmaceutical industry, particularly in the US where the company's respiratory portfolio has faced headwinds. Witty suggested that drugmakers will "see some dramatic changes in the next several years in the US," backing up the executive's decision to move away from highly priced prescription drugs in favour of vaccines and consumer products.
Sky News noted that although Woodford is calling for a break-up of GlaxoSmithKline, some other investors believe that Witty should be given more time to deliver on his strategy. "Now is not the time to look again at the group structure because the benefits of the Novartis transaction are yet to come through," remarked one investor. Earlier this year, GlaxoSmithKline completed an asset swap, including the sale of its oncology business to Novartis, whilst acquiring the majority of the Swiss drugmaker's vaccine business and creating a consumer healthcare joint venture.
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