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3 Minutes, by Reuters (Reuters) – GSK’s board of directors rejected Elliott’s demands that the British corporation alter its board of directors and sell its consumer healthcare division after separating it from its pharma business on Friday, a day after the activist investor made forceful proposals. Showcase ( 2 images ) “The Board strongly believes Emma Walmsley is the right leader for New GSK and fully supports the steps being taken by her and the management team,” GSK said on Friday, referring to the company’s core pharmaceuticals and vaccine operations. It went on to say that support for GSK’s strategy and leadership was evident in discussions with the company’s top shareholders. Elliott stated in a letter to GSK’s board on Thursday that the company should reassess its leadership and consider selling its consumer healthcare division, after confirming that it had purchased a major interest in the company. Elliott urged that more “biopharmaceuticals and scientific experience” be added to GSK’s board of directors before the company’s anticipated break-up next year. It went on to say that the new board should choose the greatest executive leadership. Former Bristol-Myers Squibb executive Charles Bancroft and Anne Beal, an entrepreneur, health policy specialist, and paediatrician, were appointed as non-executive directors in May 2020 and May 2021, respectively, according to GSK. More biopharmaceutical knowledge was on the way with new appointments, the company said, noting that this has been noted earlier. GSK announced plans last week to spin off its consumer healthcare division into a separate company, which will result in an 8 billion pound ($11 billion) special dividend for the company’s underperforming medicines business and the sale of a minority stake in the near future. GSK commented on Friday in defense of the plan, “The demerger structure reflects feedback from a significant number of GSK’s shareholders that they prefer to control Consumer Healthcare as a separate listed entity.” Should the chance occur, Elliott has advised GSK to consider a full sale of the consumer health company, which is a joint venture with Pfizer. Following a 1.3 percent increase on Thursday, GSK shares were up 0.2 percent at 1057 GMT. Walmsley, the company’s CEO since 2017, has made significant leadership changes in an effort to enhance the company’s drug research success rate, which had slipped behind peers, as well as its sales force’s commercial performance. Despite this, she admits that the stock continues to underperform industry averages. The Financial Times initially reported Elliott’s entrance on GSK’s registry with a multibillion-dollar stake in April. Pushkala Aripaka in Bengaluru and Ludwig Burger in Frankfurt contributed to this report. David Goodman and Kirsten Donovan edited the piece./nRead More

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