By Denise Roland 

LONDON-- GlaxoSmithKline PLC said its head of consumer health-care, Emma Walmsley, will succeed Andrew Witty as chief executive.

Ms Walmsley, 47, will take up the post when Mr. Witty steps down on March 31, making Glaxo the only large pharmaceutical company to be led by a woman. She currently runs the consumer health-care division, which sells drugstore staples such as toothpaste and painkillers.

Her appointment is likely to draw a mixed response from investors, some of whom were eager to see someone from a pharmaceutical background take up the role, to breathe new life into the company's drug pipeline, which has suffered some setbacks in recent years.

Glaxo shares were down 0.7% Tuesday morning following the news.

Still, Ms. Walmsley, who spent most of her career at cosmetics giant L'Oréal before joining Glaxo in 2010, is well-respected within the company: she has presided over a period of rapid expansion of Glaxo's consumer health-care unit following the formation of a joint venture with Novartis AG.

Since that deal closed last year, the consumer health-care business has been a key source of growth for the company as its huge prescription drug business struggles with the decline of its old blockbuster drug Advair.

Her strategy: to champion a selection of "power-brands," such as toothpaste Sensodyne, where she believes the consumer health-care division can achieve the strongest growth.

Ms. Walmsley will take the reins in the midst of a strategic shift engineered by her predecessor. While other major drug companies increasingly focus on expensive new therapies for cancer and other diseases, Mr. Witty, 52, has put increasing emphasis on low-margin, high-volume consumer health-care products and vaccines.

He achieved that largely through a large three-part $20 billion deal with Novartis that involved swapping Glaxo's cancer drug portfolio with the Swiss company's vaccines business and pooling their consumer health-care businesses into a joint venture controlled by the U.K. company.

Mr. Witty engineered the transaction to reduce Glaxo's dependence on the risk-laden drug-discovery part of the business, which succeeds or fails on the outcomes of lengthy and expensive clinical trials, patent life cycles and the willingness of governments and health insurers to spend ever-tighter budgets on medicines. By contrast, vaccines and consumer health care are considered more stable businesses.

That move is starting to bear fruit: Glaxo has posted solid revenue and earnings growth for the past few quarters.

Glaxo said Ms. Walmsley will join its board of directors on Jan. 1 before becoming CEO on March 31.

Write to Denise Roland at Denise.Roland@wsj.com

 

(END) Dow Jones Newswires

September 20, 2016 04:30 ET (08:30 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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