LONDON, July 15 (Reuters) – Things are looking up for GSK ( GSK.L ) and its chief executive Emma Walmsley as the British pharmaceutical giant prepares to spin off its healthcare business on Monday in the biggest London listing in a decade and the company’s largest. biggest shock in 20 years.

Buoyed by recent clinical trials of a blockbuster vaccine, and an opportunity to expand its drug pipeline with investment from consumers, GSK has also survived a long-running investor revolt.

Years of relative underperformance, missing out on a lucrative market for the first COVID-19 vaccine, and concerns about management’s technology led to the ire of Elliott and Bluebell investors last year.

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On Monday, GSK will list its consumer health group, Haleon, which is estimated to have a market value of 33-48 billion pounds ($39-57 billion), according to analysts at Barclays.

Investors urged the company to explore sales of Haleon, home of brands such as Sensodyne toothpaste and Advil painkillers. read more

GSK was intrigued by the possibilities. Unilever ( ULVR.L ) made an offer of 50 billion ($59 billion) which GSK rejected as too low.

In the end, the decision was a smart one, as Unilever’s shares went into the news, indicating that investors did not agree with the deal, Bluebell managing partner Marco Taricco told Reuters.

Now, the so-called New GSK will emerge as a vaccine and a unique pharmaceuticals player, with the wind in its sails.

In addition to being cautious with Haleon’s decisions, GSK has also used other suggestions from investors, such as hiring more people with scientific expertise in its organization, improving its pipeline, reducing its profits and being open with investors, Taricco said. .

“If you’re asking for ten things, and four or five are done, it’s better than nothing,” he said.

“Since we agreed with the administration, there has been a restoration of a lot of confidence and a lot of focus on trying to deliver things that are going well.”

PIPELINE BOOST

Last month, GSK’s highly-anticipated vaccine against RSV, a respiratory virus that has long eluded scientists, did well in a long-term trial, boosting the company’s potential for billions in sales. read more

Meanwhile, good news about its experimental hepatitis B drug that can cure it has added interest, and a growing business outlook for the HIV industry, which recently approved a long-acting injectable drug to prevent HIV infection. . Other major test scores are also expected later this year. read more

GSK has also in recent months agreed to buy cancer drug maker Sierra Oncology ( SRRA.O ) and unveiled plans to swallow vaccine maker Affinivax – while demand for GSK’s blockbuster Shingrix vaccine has also been boosted following disruptions to adult vaccines during the pandemic. read more

Elliott and Bluebell questioned Walmsley’s ability to lead New GSK as it began life as a stand-alone company – with no fixed investment in consumer health to offset the unpredictability of drug development – because he had previously run the consumer health business and had been there for a long time. to the cosmetics company L’Oreal.

Walmsley had a good track record leading Haleon, Taricco said. “Obviously he had different ideas and different wishes. But we’re always open as well… if he gives, that’s fine with us.”

Considering the 5% increase in the company’s shares this year in weak stock markets, good medical readings and M&A activity, the company’s short- to medium-term confidence seems to be growing.

But challenges remain, with the loss of its most important HIV drug, dolutegravir, expected in 2028.

Some investors also doubted whether New GSK’s 33 billion in revenue for 2031 would be possible, Barclays analysts said on Thursday, noting that their estimate was in the region of 25 billion pounds.

However, GSK has a long way to go to develop and find new drugs, including using part of the £7 billion cash windfall it will generate through the Haleon spin-off to fund more funding.

“We’ve had a good couple of months of promotion [Haleon] separation, said David Redfern, GSK’s chief policy officer. “It doesn’t mean there’s nothing to do.”

($1 = 0.8440 pounds)

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Natalie Grover reports from London Editing by Mark Potter

Our Standards: Thomson Reuters Trust Principles.



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