GlaxoSmithKline chief Sir Andrew Witty to step down

Sir Andrew said it was "the right time" for a new leader at GSK

GlaxoSmithKline chief executive Sir Andrew Witty is to retire from the pharmaceutical giant next year.

Sir Andrew has been with GSK for 32 years, having started as a management trainee.

He said: "By next year, I will have been CEO for nearly 10 years and I believe this will be the right time for a new leader to take over."

The company said the board would now begin a formal search for a replacement.

Like other pharmaceuticals companies, GSK has faced competition from cheaper generic drugs.

GSK's key measure of profits, core earnings per share, has declined in the last couple of years.

In 2014, its issued a profits warning as falling sales of the older Advair respiratory medicine dented profits.

The company has been criticised by investors recently. In January, fund manager Neil Woodford called for GSK to be broken up, claiming its complicated structure was akin to having "four FTSE 100 companies bolted together".

Asset swap

GSK has reacted to the pressures on it by restructuring its pharmaceuticals business and cutting costs.

It has also launched new products and diversified the business into emerging market into consumer health care and emerging markets.

Another part of the restructuring process involved last year's $20bn asset swap with Novartis.

Under the deal, GSK sold its marketed cancer drugs to Novartis and bought vaccines from it. It also set up a consumer health care joint venture spanning everything from Panadol to Sensodyne.

The deal increased the company's exposure to lower margin consumer healthcare at the expense of higher-margin pharmaceuticals and dented 2015 profits.

The company says earnings growth will return to double digits this year.

Sir Andrew has previously described the the healthcare environment as challenging, but said that GSK was committed to its restructuring programme.

In its 2015 annual report published on Thursday, Sir Andrew said it had been important that the timing of his announcement gave the GSK board enough time to appoint a successor.

"By doing so we will strongly position GSK to achieve the medium-term outlook set out to investors last year and deliver a return to core earnings growth in 2016," he added.

GSK is valued at more than £70bn, making it one of the most valuable businesses listed in London.