New boss Luke Miels knows perils of overpromising but there is growing sense pharma firm is closer to filling potential
I
t’s a miracle. A mere 25 years after Glaxo Wellcome and SmithKline Beecham merged to form GSK, the share price on Wednesday got back to where the combo started life – a shade over £20. It has been a very long wait.
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 first decade was a blur of expiring patents, clashing egos, quarrels over executive pay and yet more promises of jam tomorrow.
The second decade was marginally better but, from about 2013, GSK was wholly eclipsed by AstraZeneca, which became the real model of a modern science-led pharma operation under Sir Pascal Soriot (still in post today). AZ hit its revenue targets every time and added a growth-enhancing injection of promising drugs from buzzy biotech firms. These days, AstraZeneca’s stock market value is more than twice that of GSK’s, an outcome nobody would have predicted at the turn of the century.
