On this weeks episode of Fortunes Leadership Next podcast, co-hosts Alan Murray and Michal Lev-Ram talk with GSK CEO Emma Walmsley about the future of A.I. in the pharmaceutical industry, the companys new RSV vaccine for the over-60 set, and how she developed her leadership style.
Listen to the episode or read the full transcript below.
Transcript
Alan Murray: Leadership Next is powered by the folks at Deloitte, who, like me, are exploring the changing rules of business leadership and how CEOs are navigating this change.
Welcome to Leadership Next, the podcast about the changing rules of business leadership. Im Alan Murray.
Michal Lev-Ram: And Im Michal Lev-Ram.
Lev-Ram: Alan, todays guest is a woman who has been on our Most Powerful Women list for several years running, the CEO of U.K.-based pharma company GSK, Emma Walmsley.
Murray: Thats right, Michal, and she came to the Fortune office. Im so sorry you werent here for it. She was there in person.
Lev-Ram: I know. I felt very left out.
Murray: Emma became CEO of GSK in 2017. It was, frankly, kind of a tough time for the company. It was a bit of a turnaround job. It didnt have the drug pipeline that many of its competitors have. And shes been on a path to manage that turnaround.
Lev-Ram: Yeah, and we were really lucky to catch her just a few days after the companys RSV vaccine had been approved by the FDA. This is a really big deal. Obviously, RSV has been a hot topic for all the wrong reasons. But this is huge for them, and for, you know, the industry. So we were really anxious to ask her about that. And of course, about leadership more broadly. Because, you know, shes shattered some ceilings, and shes gone through a lot of challenges at the company, as you said.
Murray: I thought that was fascinating. Im not going to give it away right here, but she had some really interesting things to say about how she developed her leadership style. Its not the standard stuff you heard from CEOs 10 years ago. So here she is, Emma Walmsley.
Lev-Ram: Emma, thank you so much for joining us today.
Emma Walmsley: Great to be here. Thank you for having me.
Lev-Ram: I want to start off with something newsy, and thats this new approval for the RSV vaccine for adults 60 or older. What do you see as the potential? I mean, this hasnt been the biggest part of your business to date, the vaccine side, but what do you see as the potential here? And how meaningful is it to get this approval?
Emma Walmsley: Well, you know, its extremely meaningful, in the sense that the world has woken up to the power and importance of adult vaccination. I think, you know, were all in a very different place now than we were three years ago. And, you know, if you just step back, actually, we were one of the pioneers in adult vaccination with our shingles vaccine, Shingrix, which we launched in 2017. Thats a horrible disease that impacts you know, one in three of us, and we have over 90% efficacy to protect for that. RSV is a disease that many hadnt heard of not that long ago, and perhaps might associate with infants, because its quite common in very young children. But in fact, the much bigger burden of disease is in older adults. You have over 175,000 hospitalizations every year in the U.S., and, you know, a really quite meaningful death rate as well. Its very exciting that GSK has the first approval in history of an RSV vaccine. We do see it, you know, not only as having meaningful impact on health for those that represent 94% of hospitalizations, i.e. those that are really at risk here, we have coincidentally 94% efficacy. So thats a really impressive protection rate. You can also, we know, we have studies that show you can have it administered with a flu vaccine at the same time, and both still maintain their efficacy. And were going to be very excited to see as the data matures, you know, how long that protection lasts. Is it an annual vaccine? Or can we go for two, or maybe even three years to keep people protected? So, this is not just in human impact, and you know, there are over a billion over-60s in the world. But also we see it as a multibillion opportunity, and that adds to the more than 20 vaccines we actually do have in our portfolio, and were very invested in future innovation and adult vaccination as well.
Murray: And Im glad youre doing stuff for the over-60s. We really, really appreciate that. Look, its interesting the way you talk about it, that weve been awakened to the power of vaccines. We had Albert Bourla from Pfizer on the show and we had Stéphane Bancel from Moderna. Both of them talked about how the pandemic experience really enlivened their staffs. And you were part of that, but didnt get to the finish line.
Walmsley: Well, listen, it was an extraordinary experience for CEOs in every industry to lead through the pandemic. When you add to that our response ability to mobilize and contribute, you know, is definitely something that the whole company put full heart and hands and resources into. In fact, we did contribute very meaningfully in terms of treatments for COVID. We did, I think, cumulatively more than 3 billion in sales for Xevudy, which is a biologic for those who werent able to be protected, or for whom protection didnt work durably and, you know, really took great pride in our mobilization around that. In terms of vaccines, we do actually have approved vaccines now, in our partnership with Sanofi. And it was, you know, Ill happily say it was a bit denting at the time not to be first out the gate, and we were disappointed when that trial got delayed. But in the end, I personally could not be more delighted that the whole industry showed up in partnership at such pace in partnership, not only with our competitors, but also with governments with regulators. And you know, were now moving, I think its even today that the pandemic, as a national emergency is declared to be transitioning. And we see plenty of both opportunity and responsibility to innovate in an endemic market. Well be living with COVID as we do with with flu, and I think mRNA is an exciting technology. Were very invested in our partnership with CureVak and intend to invest more. So culturally, I think, you know, health care has never mattered more in the world than weve had this bright light shone on it, whether its the individuals, families, companies, countriesthe link between a healthy society and a productive society has never been clearer.
Murray: You and I were part of a conversation recently about these incredible new data tools. How is that going to change your business?
Walmsley: Well, I think its a really profoundly important question for every leader to be asking at the moment, and I actually think its going to change everything. I am a technology optimist. You know, at GSK, we say the purpose of the company is to combine science, technology, and talent to get ahead of disease together. And every word there counts. And when we talk about tech, thats platform tech, the kinds of things I was just talking about in vaccines, or it might be also in medicines and manufacturing, but its also data tech. And when you overlay that with all the advances we see now in the world, and understanding of genetics and genomics, and this vast explosion of data, there is a real opportunity for next-gen technologies to improve the biggest challenge of our sector, which is the productivity of R&D. It can take a decade, cost billions of dollars, and on average has a 90% failure rate to, you know, discover, develop, and invent new medicines and vaccines. Its the most profound challenge of our industry, and also of society. And, you know, when we talk about the burden of health care costs, the single best thing we can do is innovate more, think of all those diseases that dont have solutions, or were seeing the excitement were all getting when were seeing emerging solutions, like with Alzheimers and neurodegeneration, you know, there are so many spaces where we still dont have solutions in oncology as well in other infectious diseases. So, I think that, you know, the foundational first part of how generative A.I. is going to contribute to every company is in the productivity and the efficiency and the reshaping of roles, you know, across the whole value chain. What really excites me is when these technologies are going to drive innovation and faster solutions. And then when you think, you know, we all think about whats happening inside our company. If you are a, you know, a focused biopharma company, whats also exciting is, hows it going to change the full service of health care? How is it going to changeand we know thats happeningthe way doctors work, the way they spend more time caring and less time on admin? How is it already informing you know, remote care? How is it going to inform between data and robotics? How surgeries are performed? How are we going to be looking at the visualization and earlier intervention and anticipation of diagnosis of disease? How is it going to drive access and equity? I mean, there are so many ways in which human ingenuity can be, I hope and believe, combined with this opportunity to this technology is to help us get better at solving one thing we all care about, which is health and wellness.
Murray: How long have you been in this job now?
Walmsley: Six and a bit, yes.
Murray: Six and a bit years. And pharmaceutical companies can be slow moving for all the reasons youve already highlighted, you know, developing new products. So you took over a company that had some challenges, and on top of that you had an activist, Elliott Management [Advisors], get into your stock and push for some major changes. You spun out your consumer business. I wonder what thats been like for you to deal with activists from the inside?
Walmsley: You know, it wont surprise you at all, to have me say that Im not going to comment on an individual shareholder. What I stay really focused on is keeping the organization focused on what were here for, and not distracted. I think that is the job of the CEO in these circumstances is to stand in front of it, to absorb it, to engage, and to, you know, really stay focused on the priorities we laid out. And you rightly said, I was brought in to lead an aggressive change agenda for GSK. And, you know, the diversity wasnt necessarily the visible one, as, as youve alluded to, Michal. You know, I came as an insider-outsider from building up the consumer business. We sought to fundamentally change, you know, most things, the group structure, so we built up the consumer business with a series of deals with Novartis, first then with Pfizer, then with a de-merger, and frankly, did one of the biggest de-mergers in history. The first pure-play consumer health care company with Haleon, and really pleased with that. But the most exciting thing, in some ways, strategically, for that is the strategic unlock of the balance sheet it gave to GSK to invest again in innovation. You know, we increased our R&D spend by 30% during that time. We were able to take out a dividend from the de-merger to strengthen our capacity to invest in future growth. And we now started, last year, on this new five-year chapter, sort of 21 to 26, of meaningfully competitive profitable growth again led through innovation. Very much focused on vaccines, preventions of disease, but also specialty medicines, pioneering, and innovation in HIV. I mean, you know, you still got 1.2 million people in the world being infected with HIV; 38,000, in the U.S. alone. And theres a lot of innovation weve led the way through in that. Two-thirds of our pipeline is in infectious diseases more broadly. Continuing in other specialty medicines emerging in oncology. Weve got a lot of confidence in that five-year outlook. Weve started it extremely well. Then the question will be, how do the next five-year chaptersbecause we work on these long horizons in our sector, and you know, Im really excited with the progress weve made. Weve got a lot more to do.
Murray: And you have some, as you said, you have some ammunition for acquisition. You can share your plans with us here if you like.
Walmsley: Well, weve just announced some recent deals ,which were delighted withyou know, building on our vaccines portfolio with the acquisition of Affinivax and pneumococcal disease. We also, you know, bought Sierra Oncology. Very much looking forward to seeing how, you know, hopefully getting the approval for that in coming weeks, in myelofibrosis. And just a couple of weeks ago, we announced the acquisition of Bellus, which is in chronic cough, an absolutely hideous illness where I mean, youve got people who, I think its 28 million people, who are living with chronic cough that can be like, 900 times a day, with horrible quality of life implicationmainly womenby the way of that, and we think we may have a differentiated medicine there. So, you know, we stated the intent in this change agenda for GSK, to put innovation back as our number-one priority and doing what were here to do, which is deliver for patients. Were making good progress. Theres always more to do that will be organic and or inorganic. And, you know, thats, thats what were focused on.
Lev-Ram: I have one other question. Just real quick going back to this not-so-fun topic, but without naming any names, because I recognize that you cant comment specifically, but somebody out there who was agitating at some point suggested that you reapply for your job, and Im wondering, as a leader of a very important company and someone whos had a long and impressive career, like what is that? Whats the thought process when you receive a request like that?
Walmsley: Well, look, first of all, you shouldnt take on these jobs if youre nottheyre an enormous privilege, and they are a serious responsibility, and you cannot take them on if you dont have both the courage of your convictions, the ability to listen, and sufficiently thick skin, to, you know, weather some media provocation or otherwise, whenever, whenever it comes. I think in the end, what matters in this situation is also, you know, open dialogue, the support which Ive had wholeheartedly from our board and just staying focused on my job and what Im here to do, and thats exactly what were doing, and you just have to, you know, not worry about it too much.
Lev-Ram: Okay, were going to get to the leadership questions here. And you know, we already kind of alluded to this, but you are the only woman CEO of a major pharmaceutical company. And have to wonder, as somebody whos worked across our Most Powerful Women list of events, you know, the kind of the whole universe for a while now, Im just always curious, is that a distinction that is important to you? Do you think about it at all? Do you feel a sense of responsibility there?
Walmsley: You know, I dont know how it is for you, Michal. I personally, I have always tried not to define my career by my gender first. But that doesnt mean Im not extremely thoughtful, and have a tremendous sense of responsibility as well to highlight whats possible. You know, you have to be conscious of your responsibilities, if you like, as a role model, but also to highlight what needs to change. And we are a long way, a long, long way from being anywhere close to the kind of representation in leadershipwhether thats of companies or governments or institutions, that better represents the societies that we serve. And I dont think we should ever slow down or relax about our responsibilities to make those changes. And Im really proud of how focused we are at GSK on our DE&I agenda. In part on representation, by the way, we have 50% of our managers in the company are women, and 42% of our VPs and above are women. Half of my direct reports are women. The head of our U.S. business, our China Business, our ViiV CEO, so these are P&L big earning jobs, are women, our CFO and our CEO are women. And
Murray: So this has been a priority for you.
Walmsley: My priority is to get ahead of disease and serve patients, shareholders, and us to have thriving people. I have always believed, and never more than as a CEO, that we are completely dependent on the quality, engagement, alignment, and glorious diversity of our teams. And, you know, I violently reject the notion of CEOs of superheroes. I think, by definition and leadership, it is about helping others collectively and individually to do more together than we can ever do individually. And I think its a preposterous notion that we should restrict our universe of selection of talent to one segment of society that all looks the same. So, you know, its not the core of my purpose, as I said, but I just want to do the best I can for GSK. And the science shows, by the way, that diverse teams do better, the confrontation of ideas does better. Theby the way, that arguing in person sometimes make things, you know, gets to a better truth. So I do believe in this, and I, you know, Im of a generation that has definitely lived through some pretty horrible experiences along the journey, and I really hope for my daughter and for my sons that we live in a more equitable society. But its not just representation. Were very committed at GSK, for example, to broader representation in our clinical trials. You know, thats right at the core of what we do. We now have 100% of our clinical trials that have full sort of demographic and better representation diversity. For example, one of the biggest drugs were working on now is for Hepatitis B. Three hundred million people in the world, okay? Three hundred million are living with Hep B. Youve got nearly a million deaths a year from Hep B-related causes. Its the main cause of liver cancer, huge proportion of patients are of Asian descent, and thats why we have more than half of people in our trials, you know, representing the patients we serve. But the same would be true in the way we look with a different demographic of our HIV trial. So I think everything we do should be more inclusive of the world we serve.
Murray: Youre speaking here very passionately about leadership, and were learning something about your leadership style in the process. But can you talk about where that where that came from? Who taught you leadership? Where did your instincts in in leading a big company like GSK come from? Well, I love it when you actually when you actually think about your questions, because it means youre going to answer them. You know, sometimes we have people on this show who are here to say what they want to say, without thinking too much about what were asking.
Walmsley: You didnt tell me anything you were going to ask.
Lev-Ram: Its the best kind of interview.
Walmsley: Yeah. So, you know how sometimes people say to you, who is your mentor? Or who isand there is no one answer. Ive been incredibly blessed in my work. I think, actually, the most profound influence on me, and you will see with many people, if they really tell the truth on this, its often the answer, I think, was my dad. My father died last year. And he was a serving officer in the Navy.
Murray: Vice Admiral.
Walmsley: Yeah, well, yeah. But so anyway, and anyway, he was a submariner, so not an easy life away at sea. But he was profoundly committed to a sense of service and duty and hard work, actually. And I think that was a really big influence on me almost, ironically. I have no, almost no business background in my
Murray: Did you ever think you would be a CEO?
Walmsley: Absolutely not. But Iabsolutely not. But, you know, I mean, my mom was a stay-at-home mom, my dad was in the forces, my grandparents were doctors, actually. Or, on the other side, a farmer. So were literally, this is like the opposite of a business background. But Ive always been extremely curious, hungry to learn, explore the world, and been lucky enough to do work that was very inspiring for me. I never had a particular career plan. I mean, I look at the next generation, my own kids, Im just blown away by how many kind of internships and stuff they do. My entire work experience was waitressing till I left college. And then I just went for the job that would pay me the most, you know, the beginning to pay off my debt. And then I went into LOreal and was lucky enough to be sponsored. And I will always be profoundly grateful for that. To work with them all over the world, in London, Paris, New York five years, and then Shanghai and, you know, through all of that experience, you learn from the leaders and managers who inspire you to give more, to do more, to be braver, and you also learn from a couple of experiences where you go, Im never going to be like that.
Murray: Without naming names
Walmsley: No, I wont.
Murray: But stylistically, are there things you saw in leadership that were common practices that you said, Im not doing that?
Walmsley: The moments that are always inspiring are when you see leaders listening deeply, asking questions, rather than pontificating, or setting the direction, or particularly telling you how to do something. Likewise, I think its incredibly helpful when you set really clear and explicit objectives together, and sign up for there. And then, you know, are able to manage to those, as opposed to micromanaging it. I think that the best examples are when leaders tell you why. Not what. And, and, you know, I feel really lucky to have lived all over the world, because you just get exposed to different cultures and, and its very humbling, actually. And I think that the more you realize what you dont know, the more curious you become, you know. Weve got two ears and one mouth for a reason. And I get very passionate about the work I do, but Im always most inspired when I get a chance to reconnect and visit the people who are doing it. And I was very lucky early in my career to have exposure to some brilliant brains and leadership. And yeah, I feel really grateful for that.
Lev-Ram: I feel like, Alan, I have to say, doing this podcast, I not only get so much amazing advice for the workplace, but also parenting advice. There are a lot of takeaways.
Walmsley: I dont knowif you asked my kids, I dont know what they would say.
[Laughter]
Lev-Ram: Okay, so I told you we werent going to ask about the coronation. And I wont, but I, but I do want to know, I introduced you as Emma. I should have said Dame Emma.
Walmsley: Oh, no. Emma is definitely better.
Lev-Ram: What does it mean? So you were appointed Dame, commander of the British Empire for services to the pharmaceutical industry and business? Just tell us what that means.
Walmsley: Well, first of all, I definitely prefer to be called Emma, but it is part of a recognition system in the U.K., which has a lot of history, and an enormous amount of protocol and governance around how contributions to British society, on behalf of British society, beyond the U.K. are recognized. Its, you know, and it involves a degree of ceremony.
Murray: Do you get a hat?
Walmsley: You get a lot. Hats and ribbons. But listen, I dont want to make light of it.
Lev-Ram: Its an honor, its a big honor.
Murray: I suspect your father, the Vice Admiral, was extraordinarily proud at that moment.
Walmsley: Its lovely of you to say that. And I think, you know, the real thing is when people say, what inspires you, I think most daughters are spending their lives trying to make their dad proud. So
Murray: I wish that was true of my daughters.
Walmsley I bet you it is.
Murray: Emma Walmsley, what a great conversation. Thank you so much for being hereand for actually answering our questions, and
Lev-Ram: Thinking about them.
Walmsley: Yeah, Im sure somebody will want to edit me afterwards. Its been great. Michal, I loved seeing you remotely. I hope we get a chance to meet in real life.
Lev-Ram: Likewise, likewise, thank you so much.
Murray: Leadership Next is edited and produced by Alexis Haut. Our theme is by Jason Snell. Our executive producer is Megan Arnold. Leadership Next is a product of Fortune Media. For even more Fortune content, use the promo code LN25. Thatll get you 25% off our annual subscription at Fortune.com/subscribe.
Leadership Next episodes are produced by Fortunes editorial team. The views and opinions expressed by podcast speakers and guests are solely their own and do not reflect the opinions of Deloitte or its personnel. Nor does Deloitte advocate or endorse any individuals or entities featured on the episodes.
