GSK’s top scientist jumps ship in yet another blow to pharmaceutical company | GlaxoSmithKline

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GSK’s chief scientific officer is jumping ship, dealing a blow to the drugmaker as it seeks to rebuild its pipeline of new drugs and prepares for a corporate spin-off this summer.

Hal Barron, the highly regarded American scientist and veteran of Roche and Genentech, was one of GSK chief executive Emma Walmsley’s key hires a few months after she took office in April 2017.

His departure, after four years in office, comes at a critical time when GSK is under pressure from activist investor Elliott Management, a New York hedge fund, to improve its operational and stock market performance.

Barron, 60, will join Bay Area-based biotech Altos Labs, which reportedly counts Amazon founder Jeff Bezos among its backers. Barron will remain on the GSK board as a non-executive director, providing advice on research and development. He will be replaced as chief scientific officer of GSK by Tony Wood on August 1.

Panmure Gordon analyst David Cox said: “Dr Hal Barron arrived with much fanfare a few years ago and is highly regarded in the industry. The fact that GSK is in the process of splitting off its consumer healthcare business means there is a lot of pressure on R&D (and M&A) to come up with innovative new products for what will be the “new GSK” after the split. They need to do their R&D well and don’t have the best track record lately.

The drugmaker insists that despite approaching £50billion from Unilever, its plans are on track for a summer IPO of the consumer health business it has with Pfizer .

GSK resisted pressure from Elliott to sell the business and said it rejected three offers from manufacturer Marmite and Dove because they “fundamentally undervalued” the business and its prospects.

As head of R&D, which is vital for a drugmaker, Barron is GSK’s highest-paid executive. He received a total package of $11.2m (£8.2m) in 2020, while Walmsley was paid £7m, according to the company’s latest annual report.

One of his biggest ideas was to harness the immune system to attack multiple diseases and use genetic data to identify new drugs.

Walmsley brought her in to shake up the company’s $6 billion research division and tackle a culture she called “too slow and rather bureaucratic” in July 2018. A year earlier, it had already laid out plans to tighten the drug portfolio and focus on “winners” – potential blockbuster drugs with annual revenues of more than $1 billion. However, last summer Elliott again attacked GSK’s culture as “too bureaucratic”.

Graham Parry and Sachin Jain, analysts at Bank of America, said, “Wood has a strong background in discovery, particularly in small molecules at Pfizer and more recently in broader discovery/development at GSK. However, he is lesser known to investors and, despite his broader role at GSK, we expect investors to initially view him through the lens of his background in medicinal chemistry and seek evidence of a magnitude beyond of that when he takes the reins.

Walmsley described Wood, who joined GSK from Pfizer in early 2017, as an “outstanding scientist who is highly respected inside and outside GSK” and who had been a “key partner to Hal in implementing of our R&D approach”.

She said Barron’s appointment to Altos Labs was a “unique opportunity” for him, but added that GSK would continue to benefit from his expertise on the board and in R&D support.

Altos Labs, established last year, has hired scientists from around the world to lead its efforts to explore the programming biology of cellular rejuvenation in an effort to reverse disease.

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