International Finance
Healthcare

GSK starts sale of select consumer health drugs ahead of spinoff

GSK, Pfizer
The company plans to raise £1 billion before its consumer healthcare business spinoff

British pharmaceutical company GlaxoSmithKline (GSK) in an effort to raise £1 billion ahead of a spinoff of its consumer healthcare business has commenced the sale of its select health drugs, Reuters reported.

GSK has categorised three of its non-essential drugs into three separate portfolios. In addition, the company has brought on-board an independent investment bank Greenhill who will sell the products to different bidders. 

Earlier this week, two portfolios comprising Latin American drugs and Physiogel skin care products were marketed to potential bidders. The third portfolio of European drugs will be sold with a higher pricing. The reason is that the European drugs have gained more interest from private equity investors.

GSK expects to raise the stipulated amount through the sale of these consumer health drugs.

The company is planning a spinoff of its consumer healthcare business, creating a new joint venture in collaboration with Pfizer, an American multinational pharmaceutical company. The venture might take place in the second half of 2019 and will target the US and China markets.

If all goes as planned, GSK will be divided into two sets of business, with one focused on consumers and the other one pharmaceutical and vaccines, the media report said.

GSK’s popular consumer brand business including Sensodyne holds a 68 percent stake in the Pfizer partnership. According to the media report, it seems that the three of GSK product portfolios have combined revenues between  £200 billion and £300 billion. That said, the European portfolio covers 40 percent of the overall sales.

American private equity company Advent International is anticipated to be a potential bidder for GSK’s European portfolio. Other bidders include CVC Capital Partners in addition to Bain Capital and Cinven consortium.

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