Shot in the arm for Emma Walmsley as GSK circles Aurinia Pharma

Speculation mounting that GSK boss Emma Walmsley is planning to swoop on £3.6bn autoimmune disease drug developer Aurinia Pharmaceuticals

Speculation is mounting that GlaxoSmithKline boss Dame Emma Walmsley is planning to swoop on £3.6billion Canadian autoimmune disease drug developer Aurinia Pharmaceuticals. 

A deal would mark a significant moment in Walmsley’s battle to win over investor confidence in her strategy and help build the company’s future pipeline of lucrative drugs through major acquisitions. 

Aurinia is rumoured to be working with advisers on strategic options, which could lead to a sale of the biopharmaceutical company. 

A shot in the arm: A deal would mark a significant moment in Emma Walmsley’s battle to win over investor confidence

City sources claimed GlaxoSmithKline has been looking at Aurinia because it has developed a treatment for Lupus Nephritis, an autoimmune disease that affects the Kidneys, called Voclosporin, which was approved by the US Food and Drug Administration earlier this year and is now sold under the brand name Lupkynis. 

This drug could end up competing with GSK’s Benlysta, whose patents are due to expire in the next few years. However, GSK is facing competition from rival pharma giants. 

Bloomberg reported that US-based Bristol-Myers Squibb had approached Aurinia about a deal. Switzerland’s Roche, whose market capitalisation stands at £250billion, and Japan’s Otsuka Pharmaceutical, which already has a licensing agreement with Aurinia, have also been tipped as potential buyers. 

And a GSK move for Aurinia may prompt questions from Elliott Advisers – the American activist investor which has built up a stake in the FTSE100-listed giant and made a series of demands to improve GSK’s share price. Elliott has pointed to rival AstraZeneca whose shares over the past five years have risen 106 per cent while GSK has fallen by 1.6 per cent. Its demands include appointing new directors and setting up a process to determine whether Walmsley should keep her job when it spins off its consumer division. 

Elliott has also called for GSK to run a sale process of its consumer health division – which includes Sensodyne toothpaste and Panadol paracetamol – ahead of a demerger of the unit into a separately listed company next year. 

So far, chairman Sir Jonathan Symonds has backed Walmsley and rejected Elliott’s demands, saying she is the ‘right leader’ of the ‘new GSK’. However, Sir Jonathan himself has come under pressure after a little-known activist investor called Bluebell Capital Partners took a €10million stake in GSK and called for his resignation as chairman. It told the Financial Times the company needs a ‘more radical change agenda’ that includes appointing a new chief executive and chairman. 

GSK, Roche and Aurinia all declined to comment. Otsuka could not be reached for comment.