Life sciences under the cosh: Labour must do more to keep crucial firms in

Future growth in Britain is partly dependent on the Government making space for leading-edge science-based industries, notably biotech and big pharma. 

Yet there was scant attention to this from the podium in Liverpool. Back in London, the tectonic plates for big pharma shifted dramatically.

At GlaxoSmithKline, the rule of Emma Walmsley is coming to an end after nine years. Walmsley reshaped the troubled giant she inherited (see below). Patient investors are having to wait a long time for the payoff.

The contrast is with AstraZeneca. Since it escaped a takeover by Pfizer in 2014, it has been garlanded with success.

Its stable of immunology medicines for cancer is a sparkling success and the group came through for Britain in the pandemic. You might not know it from the reception it has received from Labour.

Chief executive Pascal Soriot received the brush off when he sought seed funds for a vaccine plant in the North West.

Pressure: President Donald Trump’s tariff threats on pharma and the focus on drug pricing in the US has forced a tilt toward North America

It also is in revolt against the soaring cost of the ‘voluntary’ rebate on medicines sold to the NHS. Now the second shoe has fallen. 

Donald Trump’s tariff threats on pharma and the focus on drug pricing in the US has forced a tilt toward North America. 

Soriot’s hints that he has been looking at listing in New York have come to fruition. Astra’s decision to move to a full listing on the New York Stock Exchange, describing it as ‘harmonising’ with its London listing, is a setback for the City.

It follows Soriot’s bold announcement that it is doubling down on the American market, where it earns around half its revenues, with £37billion of investment. 

That includes R&D spending and manufacturing some of which could have come to Cambridge. No one should underestimate the significance of AZ’s demarche. 

It is Britain’s largest listed company behind HSBC, with a value of £172billion. The objective of the NYSE quote is to access greater liquidity, to reshape the share register to attract more US investors and to keep Trump and politically assertive populists in the US on side.

The fear in Europe, where the Swedish Wallenberg family are cornerstone investors, is that this is a shift which could reduce the London quote to a backwater.

Notionally, AZ’s headquarters will remain in Britain. But Astra is on a journey of fragmentation with hubs in the UK, the US and Asia.

The warning sirens should be heard. If Energy Secretary Ed Miliband is not careful, Shell could be the next to drill deeper on Wall Street.

Healthy transition

When Emma Walmsley succeeded Andrew Witty at GlaxoSmithKline it was a mess. The group had been beset by regulatory snafus in its core American market and China, paying heavy fines.

GSK’s legendary reputation for discovering vaccines was strong but the pipeline for new drug discoveries weak.

In a complex deal in 2014, the firm’s work on oncology went to Novartis, in a deal which bulked up GSK’s vaccines exposure and bolstered consumer healthcare. 

Walmsley, under pressure from activist Elliott, steadied the ship. She did the splits, selling Haleon (with a pile of debt) giving GSK capacity to double spending on R&D and make acquisitions designed to improve its exposure to oncology medicines.

She will depart as chief executive at the end of the year with 19 promising compounds in development.

Walmsley recognised that too often, CEOs steer away from a succession strategy for fear of creating rivals. 

She spotted the potential of her successor Luke Miels, previously at AZ, and he came out on top in a selection process testing internal and external candidates against each other.

The FTSE 100 loses an accomplished female chief executive. But at 56, Walmsley could be back in harness before too long.

Private grief

There is much anxiety in the City about escapees from the London Stock Exchange to New York and private equity.

But there hasn’t been anything yet on the scale of yesterday’s record breaking £40billion public-to-private buyout of Battlefield video games creator Electronic Arts.

The acquirers are Saudi Arabia’s wealth fund, Trump’s son-in-law Jared Kushner’s Affinity Partners and Silver Lake. Another top-of-the-market leap into the dark.

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