GlaxoSmithKline blazes trail toward ViiV spinoff, with yea or nay expected midyear

GlaxoSmithKline CEO Andrew Witty

The ViiV Healthcare spinoff GlaxoSmithKline ($GSK) first flagged last October is getting real. The company brought on a trio of top banks to advise it on what could become the pharma industry's largest-ever public share sale.

GSK will weigh the pros and cons over the next two to three months, CEO Andrew Witty told investors on a conference call Wednesday. The British pharma giant will also be taking a look at how much of the HIV drug business to sell and where to list the shares. According to Reuters sources, Citi, Goldman Sachs and Morgan Stanley will be on hand to steer Glaxo in the right direction.

After all that analysis, the company will decide whether to move forward with the IPO. The plan is to update shareholders when it announces second-quarter 2015 results. If Glaxo decides to go for it, the company will then name the management team to take ViiV public and start meeting with potential investors, Witty said.

"They need to have time to talk to investors well in advance of the potential flotation and by the time you've done that you are now into 2016," he said on the call, as quoted by Reuters.

The move would be yet another in a long series of Big Pharma slim-down plays, aimed at helping drugmakers double down on the things they do well. Glaxo helped lead the way in that department, agreeing last April to ship its oncology assets to Novartis ($NVS) in return for the Swiss drugmaker's vaccines unit. The two companies also set up a consumer health joint venture, which will be the biggest in the business. Even after Glaxo spins off ViiV, it may not be finished; Witty has said the ViiV divestment could serve as a blueprint for future actions.

Analysts expect ViiV's market value to ring in somewhere between £12 billion and £18 billion ($18 billion to $27 billion), Reuters notes, although the price will depend on two of its HIV newcomers. Those meds, Tivicay and Triumeq, turned in higher-than-expected sales for 2014, Glaxo said Wednesday. The pair helped push overall ViiV sales to £1.5 billion for the year, a 15% increase.

The ViiV climb was one of a couple of bright spots for GSK, which is hoping to return to growth this year after declining sales of aged blockbuster Advair ravaged its 2014 sales haul. While Glaxo's stateside tally took a 10% hit, market share for slow-out-of-the-gate respiratory newcomers has recently been picking up, Witty said. Still, the company will need consistently strong performances from those meds to fill the shoes of Advair, which netted $8 billion-plus in 2013.

"I am not saying to you on this call (that) I hope to see market share increase for respiratory--I am telling you the market shares have begun to go up in the last few weeks," Witty said, as quoted by Reuters. "What I am not guaranteeing is exactly how that is going to play out for the rest of the year."

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