Witty, who has been running GSK’s European pharma business since 2003, won out over US head Chris Viebacher and COO David Stout – both of whom were considered more likely to succeed outgoing boss Jean-Pierre Garnier. The three men have been jostling for position for the last two years, with Garnier asked to delay his retirement to give the board more time to choose a replacement.
Witty is not only the youngest of the three (at a youthful 43 years of age) but also the least-known in the US, which is still GSK’s biggest and most important market. But his success in Europe, where he has grown sales volumes to combat falling prices, plus his experience in the emerging markets of Africa and Asia, seem to have won the day.
His predecessor will leave with his legacy largely intact. After presiding over the mega-merger between Glaxo Wellcome and SmithKline Beecham in 2001, Garnier cut costs, improved investor relations and radically re-organised the company’s R&D efforts – GSK now has more late-stage drugs on its roster than any of its rivals.
On the other hand, the pharma giant’s share performance under his tenure has not been spectacular – particularly this year, thanks to an ongoing row with US authorities over the possible side-effects of its diabetes drug Avandia.
Garnier is perhaps best-known for a notorious row with shareholders in 2002, when they rejected his proposed $36m severance package – much to his apparent bemusement. (“I am not Mother Theresa,” he said, with a Gallic shrug).
“I was given an institution that was not in the greatest shape and I made it stronger – that’s all you can say,” he huffily opined on Monday. “The chapters of the book don’t matter very much because they are linked to circumstances.”
Running a big pharma company is hard enough at the best of times – the incumbent must be as comfortable with complicated science as he is leading a global sales force, while also being a stickler for regulation and an effective lobbyist. So Witty faces a tough job in turning the share price around.
For GSK’s board, the appointment is both a blessing and curse. On the one hand, at least the decision is finally made. But succession planning tends to be a no-win situation – not only is the process distracting, it can also lead to the loss of the unsuccessful candidates afterwards. We suspect that headhunters are probably picking up the phone even as we write…