Glaxo's new boss goes big on science - and that should be good for Britain, says ALEX BRUMMER
On a day that Novo Nordisk shares fell 17 per cent as the aura of obesity drug Wegovy fades, it’s hardly surprising that the new boss of GlaxoSmithKline (GSK) Luke Miels distanced himself from the category.Instead, he is more interested in addressing diseases caused by obesity, such as fibrosis of the liver.Anyone looking for bolder targets from the GSK chief may have been disappointed, as he pledged continuity with his predecessor Emma Walmsley’s 3 per cent to 5 per cent revenue growth in 2026, having hit 7 per cent in 2025. A target of £40billion of income by 2031 remains intact.Walmsley’s period at the helm was largely about restructuring, with the divestment of consumer healthcare and a clearer focus on medicines and vaccines.Miels’ plan is to step up the research and development (R&D) effort. Discovering blockbusters is never easy. New drugs: GlaxoSmithKline's new boss Luke Miels (pictured) plans to step up the company's research and development effortAs a veteran of Britain’s top pharma group AstraZeneca, Miels knows first-hand about the rich rewards on offer.Last year, GSK spent £7.5billion on science, of which some £2billion was in the UK. America, GSK’s biggest market, absorbed much of the rest. The intention is quarter-upon-quarter R&D increases.Not all investors will want to see that. Some will prefer dividends and buybacks. Being fleet of foot when it comes to finding new compounds and vaccines plays to GSK’s historical strengths.In the United States, GSK suffered the slings and arrows of Health Secretary Robert F Kennedy’s obscure views in 2025.Shingrex, the shot for shingles with a potential positive impact on dementia, is a case in point. US sales plummeted 17 per cent, but overall revenues climbed 8 per cent, with a whopping 42 per cent increase in Europe.A shadow over GSK’s share price – now at a 25-year high – is concern that its valued HIV treatments will lose patent exclusivity in 2028 and fear that there is no replacement of such value on its way.Yet over the years GSK has never yielded its leadership in respiratory medicines for diseases such as asthma by constantly upgrading devices and doses. A proposed twice-a-year HIV vaccine, when it comes to fruition, could be a game-changer.Extra funding for R&D must be a plus for GSK and Britain, as the pharma group seeks to rediscover magic in neglected areas such as oncology. The financial numbers may need a polish, but the direction chosen by Miels is a good start.Going westExplaining why Santander’s shrewd executive chairwoman Ana Botin has chosen an excursion into notoriously difficult North American banking is difficult.The markets gave their verdict almost immediately after a curious agreement to buy Connecticut-based Webster Financial for $12billion (£8.8billion).The transaction, which buys Santander a fractional amount of banking in America’s north-east, led to an initial price fall greater than the purchase price. This is a little like the depreciation on a new car, as it is driven off the forecourt.Botin may think that investing in the US buys an insurance policy against Trumpian ‘America first’ initiatives. It has none of the potential synergies of Santander UK’s £2.9billion buyout of TSB from Sabadell.History is not on Botin’s side. European forays into US banking have left a trail of value destruction. Back in the 1980s, Midland’s purchase of Crocker was a disaster which drove the British bank into the arms of HSBC. NatWest was undone by its 1996 purchase of Greenwich Capital and vast investment in Citizens.Deutsche Bank never fully recovered from Bankers Trust. HSBC scurried away from its Americanple exposure.US banks may be safer since the great financial crisis. But it doesn’t take much to tip over the applecart as the collapse and rescue of Silicon Valley Bank in 2023 demonstrated.Zurich conquestIt was only a matter of time before chairman Clive Bannister and an under-siege board at insurer Beazley ran up the white flag and took Zurich’s Swiss francs.An offer worth £8billion might look generous. London stocks are on a good run – the premium may soon vanish.Zurich gains speedy boarding to Lloyds of London and Beazley’s innovative cover for climate change and cyber.Farewell to a slice of City creativity.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
