GlaxoSmithKline managed to notch some wins during the pandemic-challenged year of 2020, but COVID-19 took its toll—not only on the British pharma’s finances, but on CEO Emma Walmsley’s pay, too.
Last year was an “extraordinary and challenging year,” Urs Rohner, GSK’s executive pay committee chair, wrote in the company’s annual report. While GSK’s board was “pleased to see the continued progress” on its strategic goals—and while GSK hit its 2020 financial guidance—the company missed an internal profit target. That shortfall cut into Walmsley’s bonus, Rohner wrote.
GSK didn’t make any adjustments to its executive pay targets due to the pandemic, and the management team “just missed” an internal biopharma goal, Rohner wrote. Vaccines were a particular challenge for the company as lockdowns meant fewer people visited doctors’ offices to get their shots. The company’s star vaccine, Shingrix, posted sales of £2 billion last year but fell short of what would have been expected if not for the pandemic.
The company posted profits before interest and taxes of £8.27 billion, just shy of its target of £8.46 billion, according to the annual report.
Walmsley’s salary and pension grew in 2020, but her benefits and the pay-for-performance aspects of her compensation decreased. In total, she netted £7 million ($ 9.7 million) last year, down from about £8.1 million ($ 11.25 million) in 2019.
Totting up GSK’s 2020 accomplishments in his annual investor note, Chairman Jonathan Symonds credited Walmsley and her management team for moving GSK closer to its goal of splitting into two independent companies focused on biopharma and consumer health care. Plus, the company made progress on its “number one priority” of replenishing the pipeline, he added.
GSK notched “nine significant approvals” and started nine pivotal trials, Symonds wrote. The pipeline now features 58 potential drugs and vaccines in infectious diseases, oncology and immune-mediated diseases. Plus, the company is “seeing evidence of significantly improved commercial capability and execution and this is driving good expansion in our key growth products,” Symonds wrote.
But some pharma watchers aren’t convinced about the company’s pipeline and growth plans. In January, after setbacks on two oncology hopefuls, SVB Leerink analyst Geoffrey Porges wrote to clients that the company’s “serial disappointments are becoming a major concern for GSK’s medium- and long-term outlook.”
In all last year, GSK generated revenues of £34 billion, a 3% increase at constant exchange rates. Adjusted operating profit came in at £8.9 billion, a 2% increase at constant exchange rates.
GSK has been involved in pandemic research efforts, though it has no products yet authorized for COVID-19. Last year, the company inked a high-profile vaccine partnership with Sanofi, but the team hit a setback late in the year and recently pushed an adjusted formulation into a new phase 2 trial.
Aside from its Sanofi partnership, GSK recently teamed with CureVac to help produce the mRNA biotech’s shot and to develop next-gen COVID-19 vaccines. Meanwhile, its collaboration with another vaccine player, Clover, has come to an end. The Chinese biotech and GSK split up earlier this year, and Clover opted to go with an adjuvant from Dynavax. GSK is also involved in therapeutic research efforts.