NEW YORK (TheStreet) --Drug maker GlaxoSmithKline (GSK) is facing increasing skepticism from shareholders regarding the erosion of the company's U.S. business as well as the allegations of corruption brought against GlaxoSmithKline in China, Reuters reports.
The company agreed to pay a $489 million fine in order to settle its issues in China, but investors are still concerned over the company's strategic direction and its ability to improve financial returns, Reuters said.
One thing that would quell investor concern is if the company's chairman, Chris Gent, were to agree to step down sooner then the end of 2015. "A new chairman must be overdue. Someone needs to look at the strategic direction of the business with a fresh pair of eyes," a top-50 shareholder told Reuters.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
One of the main reasons investors have been unhappy with GlaxoSmithKline is that despite the fact the European healthcare sector has been rising over 20%, due to favorable outlook regarding new drugs, Glaxo shares have lost 10% as forecasts for earnings and sales have declined, Reuters added.
GlaxoSmithKline is facing further investigations and potential fines in the U.S., Britain and allegations of bribery in Poland, Syria, Iraq, Lebanon, and Jordan, Reuters said.
Shares of GlaxoSmithKline are up 0.08% to $47.42 in late morning trading on Monday.
Separately, TheStreet Ratings team rates GLAXOSMITHKLINE PLC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation: