GSK Boss Warns Against Tax Changes in Pharma Sector
Emma Walmsley, the CEO of GlaxoSmithKline (GSK), has expressed concerns about potential changes to the tax regime for the pharmaceutical industry. Her warning comes as the UK-based drug company reported improved profits and sales forecasts for the year.
Walmsley, who is set to step down at the end of 2025, emphasized the importance of maintaining incentives for investment within the sector. She highlighted the need to preserve tax credits on research and development, which are crucial for companies like GSK to continue innovating.
“The more important area of focus for us is to make sure that nothing happens that hampers UK competitiveness in terms of changes to tax measures,” Walmsley stated. She further explained that the tax credit scheme, which allows firms to reduce their corporation tax bills by investing in product development, plays a vital role in GSK’s decision to invest in Britain.
Strong Financial Results
The comments were made following the release of GSK’s strong financial results for the three months ending in September. The company saw a significant increase in sales and profits, with sales rising by 8% to £8.5 billion and profits increasing by 11% to nearly £3 billion.
The growth in revenue was driven by a 13% rise in sales of the shingles vaccine Shingrix. High demand in Europe helped offset a slowdown in the US market. Additionally, sales of HIV and cancer drugs increased by 12% and 39%, respectively.
So far this year, GSK’s sales have risen by 6% to £24 billion, with profits up by 9% to £8.1 billion. The company now expects revenues for the year to grow between 6% and 7%, while profits are projected to increase by 9% to 11%. This is an upward revision from previous predictions of 6% to 8% growth.
Positive Market Reaction
GSK shares experienced a surge of 6.6%, or 108p, reaching 1752p following the positive results. The market appears to be responding well to the company's performance and future outlook.
Sheena Berry, a healthcare analyst at Quilter Cheviot, noted that as Walmsley’s successor, Luke Miels, the company’s chief commercial officer, takes over, the performance is expected to remain consistent. However, she pointed out that challenges related to drug pricing could make it difficult to predict future sales accurately.
Leadership Transition and Strategic Shifts
Walmsley’s departure after nine years at the helm marks a significant transition for GSK. During her tenure, she led a major restructuring of the company, focusing more directly on developing groundbreaking drugs.
One of the key milestones under her leadership was the separation of GSK’s consumer healthcare arm, Haleon, in 2022. Haleon, the manufacturer of Sensodyne toothpaste, was spun off as a separate entity and made a successful stock market float in London. This move was seen as a strategic shift to allow the company to focus more on its core pharmaceutical innovations.