Hal Barron to leave just as pressure builds on GSK to come up with new medicines
Last modified on Wed 19 Jan 2022 10.56 EST
Pharmaceuticals company GSK’s chief scientific officer is jumping ship, dealing a blow to the drugmaker as it seeks to rebuild its pipeline of new medicines and gears up for a corporate split in the summer.
Hal Barron, the highly regarded US scientist and veteran of Roche and Genentech, was one of GSK chief executive Emma Walmsley’s key hires a few months after she took the helm in April 2017.
His departure, after just four years in the job, comes at a critical time, as GSK is under pressure from the activist investor Elliott Management, a New York hedge fund, to improve its operational and share price performance.
Barron, 60, will be replaced by Tony Wood as GSK’s chief scientific officer on 1 August, when he joins the biotech Altos Labs, based in the San Francisco bay area, which reportedly counts the Amazon founder Jeff Bezos among its backers. Barron will stay on GSK’s board as a non-executive director, providing advice on research and development.
Panmure Gordon analyst David Cox said: “Dr Hal Barron arrived with great fanfare a few years ago and is highly regarded in the industry. The fact that GSK is in the process of spinning off its consumer health business means there is a lot of pressure on R&D (and M&A) to come up with new innovative products for what will be the ‘new GSK’ post-split. They need to get R&D right and do not have the best track record in recent times.”
The drugmaker insists that, despite Unilever’s £50bn approach, its plans are on track for a summer stock market flotation of the consumer health venture it has with Pfizer.
GSK has resisted pressure from Elliott to sell off the business, and said it had rejected three bids from the Marmite and Dove soap maker because they “fundamentally undervalued” the business and its prospects.
As the head of R&D, which is vital to a drugmaker, Barron is the highest-paid executive at GSK, and received a total package of $11.2m (£8.2m) in 2020, while Walmsley was paid £7m, the company’s most recent annual report shows. One of his biggest ideas has been to leverage the immune system to attack multiple diseases, and using genetic data to identify new drugs.
Walmsley brought him in to shake up the company’s $6bn research division and tackle a culture that she described as “too slow and rather bureaucratic” in July 2018. A year earlier, she had already set out plans to tighten the drug portfolio and focus on “winners” – potential blockbuster medicines with annual revenues of more than $1bn. However, last summer Elliott still attacked GSK’s culture as “overly bureaucratic”.
Graham Parry and Sachin Jain, analysts at Bank of America, said: “Wood has a solid background in discovery, especially in small molecules at Pfizer and more recently in broader discovery/development at GSK. However, he is less well known to investors and, despite his broader role at GSK, we expect investors to initially view him through the lens of his medicinal chemistry background and look for evidence of breadth beyond this 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 has been a “key partner to Hal in delivering 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 support of R&D.
Altos Labs, created last year, has been hiring scientists from around the world to spearhead its efforts to explore the biology of cellular rejuvenation programming with the goal of reversing disease.
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