"A quarter of a century ago, the bosses of the day spoke about creating a Microsoft of the pharmaceutical world that would develop new medicines in never-seen-before quantities at faster speeds. A vast new head office in west London was opened by Tony Blair in 2002 to mirror the ambition. By then, however, the share price had already halved as investors twigged that, for all the fanfare, the mega-merger was really about bulking up defensively."
"The legacy of GSK's years of underperformance is deep suspicion of every financial promise the company makes. Investors have witnessed too many false dawns. Yet something else is also happening. There is a growing sense that a humbler GSK is closer finally to fulfilling its potential. It is why the share price had accelerated from 14 a year ago before Wednesday's 7% jump to 20.80."
"It is why the share price had accelerated from 14 a year ago before Wednesday's 7% jump to 20.80. Emma Walmsley, who departed as chief executive at the end of last year, gets credit for ending the indecision over the consumer goods division she demerged it as Haleon in 2022. In her eight years or so, she also bit the bullet by cutting an unsustainable dividend, recognising that the only route to salvation for a mis-firing pharma"
GSK’s 2000 mega-merger aimed for scale and rapid drug development but the share price fell as investors saw defensive bulking rather than transformative change. The first decade brought expiring patents, executive clashes and broken promises. From about 2013 AstraZeneca outperformed, meeting targets and adding biotech-sourced growth, leaving AstraZeneca with more than double GSK’s market value. Years of underperformance created investor distrust of financial pledges. Recent moves, including the consumer-goods demerger into Haleon and a dividend cut, have coincided with a share-price rise from 14 to about 20.80, suggesting a quieter turnaround and renewed, if cautious, market confidence.
Read at www.theguardian.com
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