This is a response to the "ex GSKer," who spoke of a lack of management skill. I couldn't agree more . Never worked there, but i have lots of friends that've had to deal with them. witty says the right thing, can't execute, some of his team of execs in several geographic areas are weak and only protecting their jobs, r and d produces nothing on it's own yet spends like crazy then get forced to pay up for biotech, they screw up both ends of the chain of command......they are so hierarchical that the top management doesn't get involved when they should, yet so disorganized that the ceo doesn't make decisions if politics gets in his way, and lots of internal people think their bosses aren't all that smart. what the stock has going for it is that it's low, and will rally like everything else if the market does better. They are also not going to do a mega merger (but not because they don't think they could integrate it and don't have the management skills), which is smart. now if they can reign in the r and d sink hole and get some skills, they could outperform. doubtful because they don't have a culture that will allow smart people to get things done. if they've done a risk weighted probability analysis on their r and d portfolio i'd be shocked.
yes GSK HAS DONE VERY WELL FOR DECADES???????????????? With share price around 80 around GLAXO WELLCOME AND SKB MERGER and no bonus shares or splits in 10 yrs..move from 80 to below thirty is pretty good.!!!!!!!!
I've often wondered the same thing. I've seen 100's of millions just wasted, yet we still got a great bonus - sounds a bit like AIG. I think the answer is that enormous profits can be made with just a few block busters, the problem is that management then looses touch with reality (they can do no wrong - money keeps pouring in). Figures I saw before I left said GSK and legacy companies spent ~37 billion in R&D over the past 12 years and got two novel drugs in return - all others were product line extensions and in-licensed drugs. That is not a sustainable business model. I think Witty is trying to do the right thing, as are a few managers, but their ambition is no match for the intra-company kingdoms that have been built (and will be preserved at any cost).
Whether that person actually knows anything about GSK, the post could be about any of a number of drug companies. For instance, what has Pfizer brought to market lately? Other than through acquisitions, little.
R&D is not a snap your fingers and out comes a product proposition. Many of the easy targets have already been solved.
Drug companies often walk in lockstep; the only difference is that some are just a wee bit more clever than the next company, and they exploit that advantage.
And they often hire the same companies to advise them on strategy.