GSK Chairman Steps Down Ahead of Company Split
GSK Chairman Sir Philip Hampton Steps Down Ahead of Company Split
By Alex Keown
GlaxoSmithKline Chairman Sir Philip Hampton will step down from his role ahead of the company’s plan to split into two separate business units. The U.K.-based pharma giant said it has started the process to find a successor to Hampton, who has led the board of directors since 2015.
Hampton’s decision came about one month after Chief Executive Officer Emma Walmsley announced her intention to split GSK into two different business units, one, a consumer healthcare business in a partnership with Pfizer, and the other, GSK’s pharmaceutical business. For the partnership with Pfizer, the U.S. company will contribute its consumer healthcare business to GlaxoSmithKline’s existing consumer healthcare business. Combined, the 2017 global sales for the consumer businesses were approximately $12.7 billion. Under the terms of the arrangement, Pfizer will receive a 32 percent equity stake in the joint venture.
In his announcement this morning, Hampton said that following GSK’s deal with Pfizer and the separation of the businesses, this was the right moment to step down. Hampton said a new chairman of the board will be able to “oversee this process through to its conclusion over the next few years and to lead the Board into this next phase for GSK.”
Vindi Banga, GSK’s Senior Independent Director on the board, said there is a clear strategy in the company’s future. Banga said GSK has a clear pathway forward and that “this is a good time to start the process to find Philip’s successor.”
Hampton joined GSK’s board of directors on Jan. 1, 2015. It was a time of transition for the company as sales of its core respiratory medications were waning. Hampton was tasked with helping to guide the company back to profitability.
Shares of GSK are up slightly in premarket trading after Hampton’s announcement was made public. Shares of GSK are trading at $39.12 ahead of the market’s open.
GSK’s decision to spin off the consumer healthcare business into a separate entity was a bold plan for Walmsley. In early 2018 there had been rumors that GSK was intending to acquire Pfizer’s consumer healthcare business. However, in March, the company walked away from the deal. Walmsley said at the time that any deals the company made should meet its “criteria for returns and not compromise our priorities for capital allocation.” Days later though, GSK plunked down $13 billion to buy out Novartis’ share of its joint consumer health business unit that markets products such as Sensodyne toothpaste and Panadol headache tablets.
Now, the company is in business with Pfizer’s consumer health program, with that company owning less than half of an equity stake. The deal with Pfizer came a few weeks after GSK snapped up Tesaro Oncology and its PARP inhibitor program for $5.1 billion. For GSK, the deal will bolster its pharmaceutical business and accelerate the build of its pipeline and commercial operations in the oncology space. GSK has been streamlining its operations to focus on drug development that will accelerate growth, such as in oncology.