Glaxo CEO Witty: Brexit Could Reduce Parallel Trade in EU But Too Soon to Tell

By Denise Roland

LONDON--GlaxoSmithKline PLC's (GSK) chief executive, Andrew Witty, Thursday said his near-decade in the top job had left the company in a stronger position and that the drugmaker would now enjoy "straight growth" for several years.

Mr. Witty, who will step down in March next year, spent much of his tenure replacing revenue that was lost when the company's old blockbuster products lost patent protection. He did that through a combination of new drug launches and acquisitions.

"Under the surface, an enormous new business has developed," he said, meaning the company would have "nowhere near that kind of drag" from generic competition for the next ten years.

The departing boss was also upbeat on the company's pipeline of drugs under development, saying many were the first of their kind.

Mr. Witty has a mixed record with investors. Some are unhappy with his shift away from the risk-laden pharmaceuticals business towards the more stable vaccines and consumer healthcare businesses.

But the boss said that while Glaxo is less dependent on pharmaceuticals than when he took the reins in 2008, innovation remains a "huge priority" for the business. "It's increasingly clear we are succeeding in delivering innovation," he said. "This isn't always visible to people early."

The Glaxo boss was also hopeful that the company's yearslong slump in China, where it faced a huge bribery scandal in 2013, is coming to an end.

The company has divested several products in China to focus mainly on innovative medicines and cut down its sales force. It has also been forced to cut prices for many medicines to win a place on the country's drug formularies.

Mr. Witty said Glaxo was now selling its medicines at lower prices than would have been the case in the past, but that he hoped this would translate to higher volumes. "As we move through the rest of the year and the end of the next, I expect China to start to grow," he said.

Write to Denise Roland at [e-mail]

(END) Dow Jones Newswires

July 28, 2016 08:39 ET (12:39 GMT)

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