GlaxoSmithKline Picks Next Chief Executive

Filed at 5:05 p.m. ET

LONDON (AP) Pharmaceutical company GlaxoSmithKline PLC named Andrew Witty as its new chief executive on Monday, ending a yearlong internal competition for a replacement for Jean-Pierre Garnier who retires next year.

Witty, 43, the current head of Pharmaceuticals Europe for GlaxoSmithKline, was chosen over chief operating officer David Stout and president of U.S. pharmaceuticals Chris Viehbacher for the top post at the worlds No. 2 drugmaker.

Analysts and investors have been speculating about who would replace Garnier since he extended his contract at Glaxo until May 2008 to see the company through the rollout of a series of key drugs. His term had been due to expire this month on his on his 60th birthday.

Andrews appointment follows a rigorous selection process, said Glaxo Chairman Christopher Dent. The fact that we have been able to select a successor to J.P. from three strong internal candidates is a testament to the quality of management at GSK.

Garnier is leaving the company with a healthy pipeline of promising new products, but its share price remains deflated after a tough year that saw a challenge to a key product and as a number of U.S. patents near expiration.

Glaxo shares are down about 8 percent since late May, when the New England Journal of Medicine printed an article that evaluated dozens of studies on the diabetes treatment Avandia, and concluded that the drug increases the risk of heart attack and death. The FDA ruled in July that Avandia could remain on the market, but it had already taken a hit to sales.

The companys shares slipped 0.98 percent to close at 1,317 pence ($26.90) Monday in London. In the U.S., GlaxoSmithKline shares slid 45 cents to end at $53.62.

Analysts said that the early decision about Garniers replacement it had been expected later in the year implied relative unanimity of the board.

Witty, the youngest of the trio of potential successors, has been at Glaxo since 1985, well before the merger of Glaxo Wellcome with SmithKline Beecham in 2000.

The economics graduate from Nottingham University has had postings around the world with the company, including managing director of Glaxo South Africa and senior vice president for the Asia-Pacific region.

Analysts said that Wittys experience in emerging markets, future areas of growth for the drug industry, would have worked in his favor.

However, Evolution Securities analyst Peter Cartwright noted that Viehbacher had recently been viewed as the front-runner.

Witty will go down well in Europe but perhaps not so well in the U.S., Cartwright said.

Analysts also noted that the announcement followed the appointment of 40-year-old Severin Schwan as CEO of Swiss drugs company Roche Holding AG in July, suggesting a generational change at leading pharmaceutical companies.

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