GSK announces divestment of OTC brands
LONDON — GlaxoSmithKline on Thursday identified the remaining noncore over-the-counter brands that it intends to divest as the company focuses its Consumer Healthcare business around a portfolio of fast-growing priority brands and emerging markets.
GSK said it planned to contact companies interested in acquiring the brands over the next few weeks and expected to complete all divestitures by late 2011.
“Consumer healthcare is a key growth driver for GSK,” stated CEO Andrew Witty. “But it is important that we focus this business around product categories, brands and markets where we have the most depth and competitive advantage, with the best prospects for strong growth. This divestment is also an example of our commitment to focus on realizing value and enhancing returns to shareholders.”
The products to be divested, which primarily are sold in Europe and the United States, had sales in 2010 of approximately $816.9 million, or 10% of GSK’s total consumer healthcare turnover. They include analgesics Solpadeine, BC and Goody’s; vitamin and supplement product Abtei; feminine hygiene treatment Lactacyd; and Alli for weight management.
“Individually, the brands to be divested have strong heritage and good prospects, but GSK has lacked sufficient critical mass in some product categories, and certain brands have lacked focus due to other global priorities,” the company stated.
In the past quarter, GSK already sold five brands to Meda Pharmaceuticals as part of two transactions that totaled as much as $60 million, according to published reports. Four of those brands are being marketed in the United States, including the cough-cold remedy Contac, the iron supplement Feosol, the supplement brand Geritol (available as both a multivitamin tablet and iron supplement tonic) and the caffeine supplement Vivarin.
Following the divestment, GSK’s Consumer Healthcare business will focus on three priority categories: oral health, wellness/OTC and nutrition. On a pro forma basis, the retained business delivered sales of approximately $7.4 billion in 2010, and grew at 6% over the 2007-2010 period. The refocused business will hold market-leading positions in smoking control, denture care, dental sensitivity, analgesics and nutrition.