What is the real future of GSK?

GSK has a pipeline and will show it next week, I wouldn't call it virtually nothing (or why show it).
Consumer has been tasked with doubling the margin from 10% to 20%, which if it happens in the medium term would equate to GBP 500 million extra profit. It is a clearly stated task, so if they fail there will be a push from investors for accountability. So I assume management think they can do it.

 

For those of you not familiar with GSK. "Low performers" here actually means tenured high performing/high salaried reps.

"Fresh hungry reps" means low salaried employees who know nothing. Things are backwards here at this dysfunctional company. Since they can't find products they must cut the bottom line.

Carry on

 

Well, the pipeline just lost another cardiovascular drug so we need to release some more reps.

 

ok

 

True, but the also had great news on the shingles vaccine. Just the nature of R&D - some good news, some bad. I don't understand those who say GSK has no good R&D when we led the industry in filings year upon year recently and some of those drugs are on their way to becoming blockbusters (dolutegravir) or helped get $18B from Novartis for Oncology (BRaf and MEK).

 

Yes, we DID lead the industry in filings and approvals in the past. Witty has in private regretted the decision to sell oncology. The market has attacked him for this poor decision (look at several articles in Forbes, Financial Times). He has been all over the place now supporting innovation when was never even mentioned by him in the past. He strikes a pose with ViiV but oncology had accelerated growth every year and had much more growth potential than HIV. With both oncology and HIV, GSK would have easily rode the storm of diminished Advair sales. Witty was talked into the sell to Novartis by Moncef. Moncef wanted to build a vaccine empire after he was pushed out of his job by Patrick. Moncef essentially led a coup d'etat by removing a stellar group (oncology) from Patrick and replacing with vaccines. The remaining oncology bits and pieces while interesting (we are the leader in Cancer Epigenetics) do not make sense when we have lost the late stage development and commercial strategy acumen. Poor, poor decision. It's time for either a break up as proposed by Neal Woodford or a new CEO and head of vaccines. Don't be fooled by the numbers today.

 

Thank you for your post

 

Allergen and Pfizer merger talks will likely increase pressure for GSK to pursue a deal with someone else. Great Q3 numbers but will have to be repeated in Q4 and beyond to convince investors we are on track in world where margin pressure increases. Honestly believe if leadership would truly pay for performance we can quit looking back and get on to better things with a smaller, leaner structure. It still comes down to the results we produce - plain and simple!

 

Oncology needed to go. While it had growth, it also consumed a huge percentage of the R&D dollars. Further, GSK wasn't even in the top 10 of companies in the space and wouldn't be able to compete in the long run. Moncef was NOT the one that made the decision to sell oncology. It is just another sign that you have no clue as to what you are talking about.

 

don't get upset over anything you read on this site .....

 

This is by far the most ignorant summary posted to date on the rational for the Novartis transaction. I pray that you are not one of the senior R&D administrators. Your comment denying the role of MS in the process of selling oncology for vaccines is an absolute lie. Maybe he didn't sign off on it but he initiated the discussion and lobbied AW hard for it. If we had to be in the top 10 to keep a therapeutic area, why did we waste $100 million on darapladib and losmapimod given our underwhelming presence in the cardiovascular space? Please leave GSK so the rest of us can pick up the pieces.

 

Shut up with the negativity and leave GSK if you don't like it here. The decision has been made, the sale to Novartis now history. It was a very shrewd move since the TKI era is coming to an end. GSK remains at the cutting edge of oncology with Cancer Epigenetics and Immunotherapy. We are not only catching the next wave of cancer therapy, we are leading it. As Tim Anderson noted, the first green shoots of growth are now emerging from Witty's plan. Not a bad strategy at all in terms of maintaining a steady source of revenue through vaccines and consumer and getting booster sources of revenue when areas such as HIV and potentially oncology come through.

 

What's the matter, Skippy? Did someone expose you for being a fool?

At least darapladib and losmapimod would have been marketed in the primary care space where GSK has a presence and would only need to bolt on a piece for the specialists.

The oncology business never reached critical mass and over time would not be able to compete.

As for MS, you have no clue what you are talking about.

Maybe you should leave the big boy talk to the adults and go back to the kiddie table.

 

The problem in Oncology was the senior leadership. The 3 ring circus was hard to watch. They had a sales force where nobody wanted to be around the leaders let alone listen to follow they're direction. It was just plain misery.

 

This is news to me. Oncology Sales seemed to be doing well, they just needed competitive compounds. They could have sold the %$#& out of dabrafenib and trametinib if given the chance. Now its in the hands of NVS.

 

Oncology and HIV to be under Moncef?

 

The argument was finely balanced on the NVS deal. I expect NVS were unwilling to sell us their vaccine and consumer business without the Oncology business in return. Therefore the decision was made to sell a high growth, but small part of R&D for two groups which give regular, but lower margin, revenue.
Pricing on oncology drugs is going to be under pressure with accusations of price gouging.

The idea to have an IPO for ViiV was a stupid idea, thankfully shelved. Partly because I think management got criticism for getting out of oncology so getting out of high margin (65% profit) HIV would have brought a lot more criticism.

 

Amidst all of the posts about Tagine and Granniecef, finally something of value. The thing that doesn't make sense in all of this is Sir Andrew justifying the oncology sale by saying that the market will no longer bear the price of high-priced oncology drugs. Well are we giving away the HIV drugs? What about mepolizumab for severe asthma? What about the gene therapy we filed assuming it gains approval? If he really was concerned about oncology drug pricing he could have been a real leader and slashed prices to whatever price point he wanted. So your comment is exactly correct, it was a quid pro quo and Andrew knew that people would want an explanation for trading low margin vaccines for high margin oncology drugs. If he had just come out and said we had to trade oncology to get vaccines then folks would have moved on by now. But to come up with the whole BS about pricing, well he is being a hypocrite since didn't he play chicken with a huge managed care group about pricing for Advair but in the end had to reduce the price to get on formulary (after by the way a huge loss in sales before GSK capitulated). Is he now slashing the price of all of our drugs? The answer is no, he isn't and will not until he is forced to do so by payers. So in the end the lesson should be for Andrew and the rest of our leaders is to be honest and transparent and people will respect you. Manipulate the truth, and well, you've seen the beating he's taken in the press.

 

$41 and change.