GSK to shed 19 products in consumer re-focus

GlaxoSmithKline ($GSK) has decided to shed some consumer health brands, including the once-ballyhooed diet drug Alli, in a move that includes shedding at least two manufacturing plants now making the products. With the sales, GSK aims to narrow its consumer business to its fast-growing "priority" brands and emerging markets sales.

The 19 products to be sold include the headache powder Goody's, nutritional supplement Abtei, sleep aid Nytol and stomach acid fighter Zantac OTC. They together account for 10 percent of GSK's 2010 consumer sales, about £500 million ($817 million), the company said. GSK also defended the brands it put on the block, saying that they have "strong heritage and good prospects" but the company hasn't been able to maximize their sales potential.

After the sale, GSK's consumer business will be a triad of units: oral health, wellness/OTC drugs and nutrition."[I]t is important that we focus this business around product categories, brands and markets where we have most depth and competitive advantage, with the best prospects for strong growth," CEO Andrew Witty (photo) said in a statement.

At least two manufacturing plants will be part of the sale. One, in Aiken, SC, turns out Alli, once pegged as a potential blockbuster. The diet drug never really got off the ground--despite intensive marketing--and then safety concerns depressed demand further, the Wall Street Journal notes.

The other plant slated for sale, in Memphis, makes BC, Goody's and Stanback headache powder and Chap-Et lip balm, all products that are on the block. Together the plants employ 460 people. Until GSK finds a buyer--which it hopes to do by year's end--there's no way of knowing whether the plants will stay open. The company said the plants will operate normally until a buyer is found.

- see the GSK press release
- get more from the Memphis Business Journal
- see the article from the Augusta Chronicle
- read the WSJ's take

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