Half year results from GlaxoSmithKline (GSK) showed that its Consumer Healthcare unit is performing relatively well as it prepares for its joint venture with Pfizer.
The division’s total sales grew 5% to £1.92bn, primarily driven by the performance of its ‘Power brands’.
The US performed well (+11%), driven by its Wellness portfolio, while the group’s International region (+4%) benefitted from strong results in India and South-East Asia. In Europe, sales only grew 1% but GSK highlighted that the business was stabilising as a result of improved performance in Oral health.
The British company announced in December last year that it had reached agreement with its US rival Pfizer to combine their consumer health businesses into a new joint venture that will have combined sales of approximately £10bn and eventually be spun off into a separate company.
The European Commission (EC) recently approved the deal, on the condition that Pfizer sells its pain relief brand ThermaCare.
GSK’s Chief Executive, Emma Walmsley, said yesterday that it expects to complete the joint venture shortly, “laying the foundation for the creation of two great companies: one in Pharmaceuticals/Vaccines; one in Consumer Healthcare.”
The group confirmed yesterday that HSBC’s current deputy chairman Jonathan Symonds will succeed Philip Hampton as Non-executive Chairman, ending a six month search for a new head. The former Chief Financial Officer at AstraZeneca will be tasked with steering the business through its planned break up into two separate companies.
GSK’s non-executive Vindi Banga: “We are delighted that Jon will lead the board through this next phase for GSK, and we look forward to him joining in September.”
Symonds added: “I am delighted to be joining GSK, at what is a really important time for the company as it seeks to create value from its new R&D approach, and to create two, new world-leading companies, one focussed on Pharmaceuticals and Vaccines, the other on Consumer Healthcare.”
NAM Implications:
- Time for competitors to reassess relative competitive appeal, by brand under the agreed deal…
- As the combined consumer operation accelerates to make up for any lost time…
- Watch this space…
