Two months after GSK sold a significant chunk of its stake in Haleon, Pfizer is prepared to do the same with a larger sell-off, according to a Monday filing from the consumer healthcare company.
Pfizer is set to reduce its stake in Haleon from 32% to 24% by selling 630 million shares in a public offering, Haleon said. The value of the shares is roughly 2 billion pounds ($2.6 billion), according to Reuters.
Haleon, for its part, will repurchase shares worth about 315 million pounds ($401 million) from Pfizer, it added.
The move is no surprise. In May of last year, Pfizer Chief Financial Officer David Denton told The Financial Times that the drugmaker was prepared to monetize its stake in Haleon in a “slow and methodical” manner so it wouldn’t reduce the market value of the London-based company.
Selling shares in Haleon will help Pfizer reduce its debt after its $43 billion acquisition of Seagen, Denton said at the time. It also will allow the company to increase returns to shareholders.
Back in 2019, GSK and Pfizer teamed up in consumer healthcare by forming a large joint venture, with GSK owning 68% of the combined outfit. Three years later, GSK spun off Haleon by listing it on the London Stock Exchange, making it the largest pure-play consumer health company in the world.
GSK initially retained a 13% stake in Haleon but has since sold all but 4.2% of the company. In January, GSK sold 300 million shares in Haleon, collecting roughly 978 million pounds ($1.24 billion) in proceeds. After that sell-off, Pfizer and GSK agreed to stand pat on their stakes for at least 60 days.
In response to the Pfizer sell-off news, Haleon’s share price fell by 2%.
Last month, Haleon reported 2023 revenue at 11.3 billion pounds ($14.4 billion), which was a 4% increase from 2022. The company expects sales to grow between 4% to 6% this year. Some of Haleon's top products are Centrum vitamins, Advil painkillers, Sensodyne toothpaste and Tums heartburn medicine.
The moves are part of an overall trend of pharma companies separating from their consumer health and generic businesses to concentrate on their more lucrative efforts to develop and commercialize innovative medicines. Johnson & Johnson has split from its consumer health business establishing Kenvue. Novartis has done the same with its generic powerhouse Sandoz.
“We love the Haleon business but it’s not strategic,” Denton told the Financial Times last year.