Name: Why GlaxoSmithKline Won't Do A Merger
Uploaded: 2015-12-08
Duration: 4 min 13 s
Description: CEO Andrew Witty explains to Fortune's Susie Gharib.

 What a year for big mergers for the drug industry. And especially that huge deal between Pfizer and Allergan. What does that deal mean for your industry? If you look at it from our point of view, it has no impact on us at all. We don't compete with any of those products. It doesn't really change anything from our perspective. I think what we are much more focused on are what's happening in the companies who are developing technologies which could develop products which are more of a threat to us, and how do we compete with those. If I'm honest with you, this kind of transaction doesn't really change that territory. You're saying that the Pfizer Allergan combination doesn't pose more of a competitive threat at all for Glaxo? I don't think this makes a big difference to our competitive landscape. Our big competitors are companies like Gilead in HIV for example, or AstraZeneca Respiratory. Those are the companies that we tend to be focused on. There have been reports that Pfizer approached GlaxoSmithKline about a possible takeover. Obviously they were turned away. Tell us why. Well, we don't talk about any kind of conversations that we may or may not be involved in or have been involved in anemone for obvious reasons. So unfortunately, that's the one question I'm not going to be able to give you any kind of comment on. Given all the deal making that's going on in your industry and companies getting bigger and bigger, can Glaxo really go it alone and still compete in this very competitive environment? Absolutely. I mean, we're a huge company. We've got over 100,000 employees. We operate in 130 countries around the world. But do you think it's just a matter of time that Glaxo is going to have to partner up with somebody, whether you're a buyer or seller? No, I don't think it is. We've just done a transaction with Novartis to build up the two areas we wanted to strengthen. We feel like those areas have got tremendous growth. We're signaling a very strong optimism for the growth of consumer and vaccines over the next five years. I prefer that. Why? Because it's more focused. I haven't put the whole company in play. I can only spend three or four years going through a massive integration. It's something we can do in a very targeted way, it's very focused. That's a great game plan for us over the next several years. We're very happy with that. And it doesn't matter to us that we're the biggest or not in the sector. We're big where we need to be big, we lead where we need to lead. As you know, the Pfizer and Allergan deal has really stirred up debate about these so-called tax inversions. I'd like to get your view on these so-called tax avoidance tactics in the context of the overall industry. Is it helpful or harmful? As far as the overall industry's concerned, the industry unfortunately over the last several years has attracted too much controversy for a variety of reasons. What we all have to focus on as members of this industry is to get the message across about the great things that the industry develops, the great work that our research scientists are doing. And we need to try and figure out ways to solve problems to improve the reputation of the industry. Pfizer's CEO Ian Read has said that this decision is good for the country. Our fortune editor-in-chief thinks otherwise and says it's a bad decision. It's going to have long lasting impact for the industry and for the country. And he calls it Pfizer's desertion. I mean, where do you stand on this? In our case, we're a British company. We've been a British company for 300 years. This year's our 300th anniversary. But because we're a British company, we focus on working with the British government to try and improve the environment so that we can invest more in Britain, create more research in Britain, as a consequence, generate more exports. 98% of my sales are outside of Britain. So Britain is not important to GSK as a market, but it's a critical important center for R&D and manufacture, and we're a critically important company to Britain for tax and job creation. I do think companies, just like individuals, have a role to play in society. We can't be separate from it. Having a role to play in society it doesn't mean just take, it means pay back, it means contribute, it means helping to build and evolve a better system. So my overall view is much better to take that assertion, that commitment, and then work through problems with people to make it better for everybody. 

Why GlaxoSmithKline Won't Do A Merger

Leadership

CEO Andrew Witty explains to Fortune's Susie Gharib.