Glaxo's new chief Witty faces tough job

By Ben Hirschler

LONDON (Reuters) - Andrew Witty, who takes over as chief executive of GlaxoSmithKline Plc (GSK.L: Quote, Profile, Research, Stock Buzz) on May 22 in the year's biggest scheduled British corporate handover, faces a daunting task.

A safety scare over diabetes drug Avandia plus generic competition means the world's second largest drugs company faces a fall in 2008 earnings, while new drugs are taking longer to emerge from the laboratory than originally hoped.

With no quick fix in sight, analysts believe Witty's top priorities will be to shore up sales and reassure investors on the large but unproven pipeline.

"There's no jam today. He needs to deal with the issue surrounding Avandia and decide whether that product is going to grow again; if not, they need to kill it," said Navid Malik, pharmaceuticals analyst at stockbroker Collins Stewart.

"He also needs better visibility on the pipeline."

The straight-talking 43-year-old Briton takes over from Frenchman Jean-Pierre Garnier, who has led the group since its creation via a merger seven years ago.

His appointment reflects a trend towards younger chief executives in the pharmaceuticals industry. Severin Schwan, 40, took over at Switzerland's Roche Holding AG (ROG.VX: Quote, Profile, Research, Stock Buzz) two months ago.

Witty -- an insider who has worked in all of Glaxo's geographical areas -- inherits a business with a revamped research and development machine, based on semi-autonomous drug discovery units, but a flagging stock price.