Pioneering pharma CEO

The appointment of the head of consumer healthcare as the next CEO of GlaxoSmithKline is a watershed moment for the sector, with Emma Walmsley becoming the first female CEO of a global large cap pharmaceuticals company. The sector has scored surprisingly poorly on diversity at the CEO level. The appointment may come as a surprise to many, especially high profile investors, who are calling for the break-up of the company.

The choice of a candidate with no experience in pharmaceuticals will dampen the prospects of a potential break-up, and it may hasten the likelihood of Novartis exercising its put option on the consumer JV, of which it owns 35.6%.

The shortlist of internal candidates with pharmaceutical experience would have been sharply curtailed given the problems the company faced in China, which resulted in a $490m fine in 2013. The current CEO has been in tenure for eight years and has driven a programme of diversification, a markedly different strategy to other large pharmaceutical companies which are focusing on becoming pure R&D players. The challenge awaiting the new CEO, who takes over in 2017, should not be underestimated, with declining R&D returns, increased generic competition and pricing pressure from healthcare providers, especially in the US.