As JP wavesa golden goodbye to anxious employees and unhappy investors, the retiring ceo leaves his post at the beleaguered drugmaker with a decidedly chipper feeling. In a chat with The Financial Times, he's characterized as coy when asked to describe his legacy.
He concedes that “there are dozens of things you wish you had done differently,” including earlier and wider dissemination of its analyses of Avandia, the diabetes drug that has seen scrips plummet after a study last year raised concerns about side effects. But JP isn't inclined to recite his list. "I have no regrets. The legacy of GSK is not what happened in the past 10 years. It’s ahead of us.”
To make his case, JP points to Glaxo's research arm, Centres of Excellence in Drug Discovery. “There is no question that the model has raised productivity,” he insists. “This is not just a one-shot deal. We are 200 per cent better at re-loading the pipeline. You have to really create the conditions for success. If not, you have zero chance. You can have serendipity only if the grounds are right.”
One unnamed analyst, however, threw a bit of cold water on JP's boast. “Whether he likes it or not, his legacy will relate to the CEDDs because he’s made such a big deal of it,” the analyst tells the FT. "He's left GSK in far better shape, but the speed and quality has probably not matched the expectations he led the market to have. It’s not moved from serendipity to predictability.”
Another accomplishment JP raised was the creation of a new corporate culture in the wake of the merger with SmithKlineBeecham. “The company - it’s not me - has made significant progress. I take pride in having done the merger, in creating a single company with a very strong culture of performance, integrity and passion.”
As to stock performance, well, the FT notes that, since 2000, Glaxo's price-earnings ratio has declined sharply and continues to underperform the market, despite share buybacks and dividend hikes. In JP's defense, Lehman Brothers analyst Jo Walton says all drug stocks - not just Glaxo - aren't good investments. “Nobody could have sensibly predicted the changes in the sector,” she says. “In the long-term, (as an investor) you simply didn’t want to own drug companies.”