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Glaxo's Medicine Man

From Guardian Web (September 9, 2010)

We understood when Jon Symonds quit as AstraZeneca’s finance director to join Goldman Sachs a few years ago: the cut and thrust of acquisitions seemed more exciting than totting up the cost of the next patent expiry. Besides, the pay sounded better.

As it happened, Symonds soon returned to the world of pharmaceuticals at Novartis. But here’s a move that is meant to be permanent and is a big surprise: Simon Dingemans, one of Goldman’s top dealmakers in London, is joining GlaxoSmithKline as chief financial officer. Why?

Dingemans’s answer is that he is 47, fancies a change of career and has long held an ambition to be finance chief at a big company. He is prepared to accept what Glaxo describes as a "significant reduction in remuneration". Unbelievable? No, merely unusual.

The appointment does not, as Glaxo was quick to insist, herald a return to the era of mega-mergers. That, too, should be accepted at face value. Chief executive Andrew Witty has been insistent that Glaxo does not need such distractions. Combining Glaxo and SmithKline was fiendishly tricky and, 10 years on, the company still finds costs to cut.

Instead, Witty is talking about "bolt??on" acquisitions as he pursues his great goal of "de-risking" the company by lessening its concentration on "white pills" sold in the west. In translation, that means expanding in consumer healthcare, especially in emerging markets, and perhaps pursuing more arrangements like the pooling of HIV research with Pfizer.

Dingemans worked on the Pfizer deal so he knows something of what he’s signing up to. That does not mean the switch will be smooth, of course. But there is joy in heaven over every investment banker who chooses to do a proper job. Just don’t expect a rush.


Posted: September 2010