Let GlaxoSmithKline ($GSK) be clear: It's open to spinning off its consumer healthcare division at some nebulous point in the future. But it's not happening anytime soon.
The pharma giant has no plans to divest the unit--newly bolstered as part of a joint venture with Novartis ($NVS)--in the near term, company spokesman Simon Steel told Bloomberg, following a Monday Financial Times interview with CEO Andrew Witty hinting that a spinoff might be in the cards.
Through the JV, on track to launch next year, Glaxo--which will have majority control of the combined entity--will simply have more choices when it comes to deciding which way to take the $11 billion business, and a spinoff could be among them.
"Our proposed deal with Novartis strengthens the value of our businesses and also delivers enhanced options for the long run," Steel told the news service in an e-mail.
The Novartis transaction, which also included sending its oncology business to the Swiss pharma in exchange for most of its vaccines lineup, is just part of the in-vogue slim-down strategy the British drugmaker has underway. It's already sold off two prescription-only cardiovascular drugs--and a manufacturing site--to South Africa's Aspen, as well as former consumer health stalwarts Lucozade and Ribena--popular drink brands that Japan's Suntory snatched up for about $2.3 billion.
And like a handful of its peers--including Sanofi ($SNY) and AstraZeneca ($AZN)--Glaxo is considering unloading a larger portfolio of older, off-patent meds, the company has said.
But with sales and earnings faltering in the face of increased competition to lead product Advair and ongoing bribery investigations around the globe, some think GSK's divestments should come sooner rather than later--particularly where it comes to consumer health, MoneyWeek's Ed Bowsher wrote Tuesday.
"If Glaxo was split up into two companies with separate stock market listings, you could invest 60% of your money in 'Glaxo Consumer' and 40% in 'Glaxo Pharma'. Or whatever proportions you fancied. The choice would be yours," he said. "I think that extra choice could bring in more investors."
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