Prominent U.K. investor Neil Woodford has been calling for a four-way breakup of GlaxoSmithKline ($GSK), a company he says is too "complicated" for its own good. But take it from GSK vaccines chief Moncef Slaoui--splitting apart is a bad idea, at least on the vaccines front.
|GSK's Moncef Slaoui|
As Slaoui told FiercePharma in an interview, the British drugmaker's vaccines business has "enormous synergies" with its pharmaceuticals business. While R&D and manufacturing are currently separated between the two units, when it comes to distribution and back-office functions--such as finance, legal, compliance and HR--there's significant overlap, he said.
Beyond that, keeping the divisions under the same umbrella affords the company more opportunities to get their products noticed. Public health authorities and ministries of health want to talk about vaccines, which gives GSK the chance to talk up its medicines, too. And conversely, "our commercial presence driven by our pharmaceutical portfolio allows us to have a commercial presence for vaccines," Slaoui said.
The moral of the story? "Separating those parts of the business, I think, would equate to a very, very significant loss of opportunity and a much, much higher cost structure," he said.
That's not to say there aren't areas of Glaxo's business that would be easier to separate. At the J.P. Morgan Healthcare Conference, CEO Andrew Witty noted that the company's consumer health division--a Glaxo-controlled joint venture with Novartis ($NVS) set up as part of their multibillion-dollar asset swap last year--is so big in scale that "it could one day have a life of its own."
But while the heft of that business "creates the optionality for potentially different structures down the road," don't expect a spinoff to happen overnight. First, "we certainly have a year or two more of work to finish" around integrating the pieces it gained in the Novartis transaction, he said.
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