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Activist Bluebell Raises Pressure on Glaxo CEO Walmsley

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(Bloomberg) -- Activist hedge fund Bluebell Capital Partners turned up the pressure on GlaxoSmithKline Plc Chief Executive Officer Emma Walmsley, questioning her leadership of the U.K. drugmaker after following Elliott Investment Management in buying a stake.

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Bluebell called on Glaxo to run an internal and external search for a candidate to lead Glaxo after a spinoff of its consumer health division next year -- a job Walmsley wants to keep.

The stake is about 10 million pounds ($13.7 million), according to a person familiar with the situation. While the holding is a tiny fraction of the company’s 72 billion-pound market value, it adds a small but vocal critic of the drugmaker’s strategy.

Bluebell, which manages 90 million euros of assets, recently participated in a campaign with other investors that prompted an overhaul of yogurt maker Danone SA’s management. At Glaxo, it’s targeting the pace of change being led by Walmsley and the board.

“Unfortunately, there’s no sense of urgency,” Bluebell’s Chief Investment Officer Giuseppe Bivona said by phone.

Elliott earlier this year revealed an investment in Glaxo, putting Walmsley’s leadership under a spotlight. The company has struggled to develop blockbuster new treatments and has failed to create a Covid-19 shot despite being the world’s largest vaccine producer.

Read More: The Barbarians Are at the Gate of a Faded U.K. Pharma Giant

Bluebell took more direct aim at Walmsley, citing her performance during a recent investor presentation where the company set new targets. The letter highlighted what it characterized as her lack of pharma experience. Walmsley worked at cosmetics company L’Oreal SA prior to joining Glaxo.

“The lack of Mrs. Walmsley’s industry knowledge was also very evident during the latest investor update, which -- given the criticism raised prior to the event and pent-up expectation for the occasion -- should have been ‘the’ opportunity for her to show strong leadership and dispel this perception,” the letter said.

Glaxo shares were little changed in London.

Before joining GSK’s consumer unit in 2010, Walmsley spent most of her career at L’Oreal. She isn’t the only big pharma leader without a scientific background. Sanofi CEO Paul Hudson is an economics graduate, while Roche CEO Severin Schwan studied economics and law before joining the company as a trainee.

Bivona co-founded London-based Bluebell in 2019 with fellow finance industry veteran Marco Taricco and Francesco Trapani, who ran Italian jeweler Bulgari SpA for nearly three decades. Prior to that, the three spent years helping Elliott, Jana Partners and other activists execute campaigns in Europe and the U.S.

While this is at least the tenth company Bluebell has taken on, the firm’s record is mixed. Last year, Bluebell unsuccessfully tried to push Mediobanca SpA to get rid of its 13% holding in Assicurazioni Generali SpA. It was also involved in activist campaigns against previous management of Banca Monte dei Paschi di Siena SpA and has failed so far to get Italian aerospace company Leonardo SpA to name a new CEO.

“The board and executive team remain absolutely focused on the need to deliver improved and sustained value for all shareholders,” Glaxo said. “The points set out in the letter from Bluebell Capital Partners are not new, and in fact are ones we have already made clear we are addressing.”

(Updates with background on Bluebell in third paragraph)

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