Deal value: Vaccines--$7.05 billion; Oncology--$16 billion
Deal status: Open
April's transaction between industry behemoths Novartis ($NVS) and GlaxoSmithKline ($GSK) wasn't your average deal. The three-part, multibillion-dollar transaction saw the pair beef up in areas where they were strong and cast off their weaker units to reshape the vaccines, oncology and consumer health landscapes.
In selling its vaccines unit--excluding flu shots, which it sent to Australia's CSL this week--to the British pharma giant, Novartis bowed out of an area it had struggled in since buying out Chiron in 2006. GSK, on the other hand, bulked up enough to give world vaccine leaders Merck ($MRK) and Sanofi ($SNY) a run for their money. At the center of the deal was Bexsero, a meningitis B shot approved in Europe and awaiting an FDA decision in the U.S. At the time, Glaxo said it would help vaccines kick in 14% of Glaxo's top-line haul going forward.
In return, GSK sent its oncology portfolio over to Switzerland to help turn Novartis into a cancer heavyweight, in particular bringing the Basel-based company a new melanoma focus. That move raised a few more eyebrows than Novartis' divestment of vaccines, which it had been hinting at. After all, Glaxo had some recent victories in oncology, including approvals of melanoma therapies Tafinlar and Mekinist. But the way CEO Andrew Witty justified it, the deal captured some present-day cash for a portfolio that would have paid off little by little--think long-term profits. The $16 billion cash infusion would also fund a £4 billion shareholder payoff, Witty promised, and help the company narrow its focus to a few key areas.
To round it out, the two teamed up on a consumer health joint venture, which, when it launches next year as GSK Consumer Healthcare, will become the world's biggest player in the field with about $10 billion in annual sales. As the name might suggest, Glaxo will have the larger stake at 63.5%, along with managerial control. The venture will combine some high-powered brands under one roof, including Novartis' pain reliever Excedrin and Glaxo's quit-smoking products Nicorette and Nicoderm.
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-- Carly Helfand (email | Twitter)