Witty to succeed Garnier as CEO of Glaxo

Briton wins 2-year competition against two other executives

October 09, 2007|By Philadelphia Inquirer

PHILADELPHIA -- GlaxoSmithKline PLC has named Andrew Witty, head of the firm's European drug business, to succeed outgoing chief executive J.P. Garnier at the end of May.

The decision by the board of directors yesterday caps a very public, two-year competition for the top job among Witty and two other executives.

The two others were David Stout, president of pharmaceuticals operations, who lives in the Philadelphia area, and Chris Viehbacher, who heads GlaxoSmithKline's U.S. pharmaceuticals operations in Research Triangle Park, N.C.

Witty, 43, the youngest of the three, will take responsibility for running the world's second-largest pharmaceutical firm and its pipeline of new drugs, which will be critical to its future.

Witty, a 22-year company veteran who has worked in Asia, Africa and the U.S., is known for suggesting innovative pricing strategies in Europe where drug prices are much more regulated than in the United States.

A British native, he has proposed that his firm receive higher prices for drugs that make a big difference in medical care and lower sums for less critical drugs.

Last year, Witty created pilot projects with two European governments, granting the company the ability to renegotiate some drug prices once more information has been learned about their effectiveness.

Several analysts said that Witty's experience in Europe could help with brewing price pressures in the U.S. where several factors, including the growth of generics, have been dampening prices overall.

During his tenure, the firm's European sales increased nearly 10 percent over the past four years, The increase came despite severe pressures from European governments eager to cut drug prices.

GlaxoSmithKline spokeswoman Nancy Pekarek said Witty "has done some innovative things in Europe. He's clearly a dynamic guy."

Still, she said, he has issued no new strategic plan for the entire company or even indicated where he will live.

The firm, based in London, has two U.S. headquarters, one in Research Triangle Park, and the other in Philadelphia. Whether both facilities would continue as they are was unclear yesterday.

Among the challenges Witty will face: Drugs accounting for about 25 percent of sales will go generic in the next five years, meaning that their prices will drop sharply, including that of its top seller, the asthma drug Advair.

GlaxoSmithKline's No. 2 drug, Avandia for diabetes, has been linked to increased heart attacks, and could get a black box warning on its label. It is also possible that the Food and Drug Administration could remove it from the market.

The company has 98 compounds in the later phases of testing, according to an analysis by the investment firm Edward Jones in St. Louis. But much depends on how those drugs fare in trials.

Edward Jones' senior health care analyst Linda Bannister is predicting a negative 3 percent growth for GlaxoSmithKline's existing drugs from 2006 to 2011, and a 1 percent growth among pharmaceuticals overall, including contributions from the pipeline.

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