GlaxoSmithKline expands Canada plant, adds production of topical pain reliever

Emma Walmsley
GSK CEO Emma Walmsley has resisted the call to sell off the consumer health unit. (GlaxoSmithKline)

GlaxoSmithKline, which has bet big on its consumer health operations, has made a small investment in a manufacturing site in Canada in part so that it can add production of an over-the-counter pain reliever. The expansion comes even as the drugmaker is preparing to make companywide cuts.

The company recently unveiled the $36 million Canadian dollar ($27 million U.S.) addition of equipment and enhanced manufacturing development capabilities at its plant in Mississauga, Ontario. Additionally, the investment is allowing GSK to transfer production of Voltaren, a topical pain reliever, to the plant. It expects to have the product ready for commercial sales in Canada by mid-2019.

“Our combination of a strong market positioning, high-quality products, top talent, and newly enhanced infrastructure is enabling us to attract key consumer health and prescription manufacturing mandates, both now and into the future,” site director Olivier Keuller said in a statement.  

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The plant already produces more than 50 products, including prescription drugs. The expansion will increase its capacity to nearly 50 million units annually by 2020 from about 30 million now.

RELATED: Forget a consumer spinoff. GlaxoSmithKline is plotting a $525M cost-cutting drive instead

Consumer is one of three key businesses GSK focused on following a $25 billion asset swap with Novartis in 2015. CEO Emma Walmsley has been under some pressure to sell off the unit, but in the company’s last earnings call she said GSK would instigate a cost-cutting program instead so that the three units will have the funds to grow.

“We believe that the three-business structure of the group offers significant opportunities in the current healthcare environment and provides GSK with more stability in our earnings,” she said.

The plan is to squeeze about £400 million per year in savings by 2021, while costing the company £1.7 billion over the next three years to put into place.

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