UK government concerned about GSK’s fate amid looming activist investor showdown

Worries about one of the U.K.’s crown jewels emerge as Elliot tells shareholders, “change is coming”.

The government’s concerns came after activist investor Elliot Management bought a “significant” stake in the company in April. While the exact stake and the motive for the purchase are unknown, commentators believe Elliot could look to speed up GSK’s split into two separate businesses – one focused on biopharma and the other on consumer health, or worse, push for the pharma giant to be sold to a U.S. rival. However, as pressure mounts on the company’s CEO Emma Walmsley, she will breathe some sigh of relief after it emerged, the U.K.’s business secretary Kwasi Kwarteng had asked officials to lend their support to her in what some expect will be a showdown for the company’s survival.

Following a series of recent disappointments on its R&D front, GSK’s CEO has come under immense pressure to prove she’s the right person for the job. The company has also seen its share price lag, remarkably, that of its chief rival AstraZeneca since she took over. To make matters worse, AstraZeneca’s Covid-19 vaccine has also emerged as one of the trusted weapons against the coronavirus worldwide while GSK’s Covid-19 strategy has fallen short, at least until recently. With the U.K. government throwing its weight behind Walmsley, a politically charged battle is likely on the cards should Elliot push for an acquisition by a U.S rival, akin to Pfizer’s $118 billion buyout attempt for AstraZeneca back in 2014.