Sector News

Novartis 'clearly' plans to hang on to GSK consumer stake: analyst

November 29, 2017
Life sciences

Novartis has the option to sell its stake in its GlaxoSmithKline consumer health JV to its partner. But it doesn’t sound like that’s what the Swiss drugmaker’s plotting.

As outgoing CEO Joe Jimenez and successor Vas Narasimhan told Bernstein analyst Tim Anderson, the company believes there are a couple years to go before the venture reaches its full potential.

“We want to see the synergies from the combination continue to mature, allowing the stake to increase in value,” they said in quotes paraphrased by Anderson, adding that, “once that happens, we can evaluate what is the right thing to do with that capital.”

As Anderson wrote in a note to clients, that answer “clearly reads that Novartis will not be ‘putting’ its stake to GSK anytime soon,” despite earlier rumors that the Swiss drugmaker could use the money to fund big-time M&A.

Novartis and Glaxo first formed the industry-leading JV in early 2015 with the close of their three-part, multibillion-dollar asset swap. GSK agreed to hold the controlling stake, taking the burden off Novartis, which had been struggling in the consumer health department thanks to quality-control issues and product recalls.

And since then, Glaxo has echoed Jimenez and Narasimhan’s message, ignoring calls for a spinoff and insisting that the unit needed time to come into its own.

Meanwhile, the Jimenez and Narasimhan’s comments should “ease investor concern” about Glaxo scrapping its dividend, Anderson figures—unless, of course, it decides to use the money to go after Pfizer’s consumer business, an asset CEO and former consumer head Emma Walmsley has said the company is looking at.

By Carly Helfand

Source: Fierce Pharma

comments closed

Related News

February 25, 2024

Pharma CFOs need R&D vigilance in tough economic times

Life sciences

As inflation, high interest rates and a tight investment environment continue to create headaches, 72% of CFOs said economic volatility poses the same or greater risk to their business this year compared to 2023 in a recent survey from BDO — and there are more changes afoot.

February 25, 2024

Agilent CEO Mike McMullen to retire, succeeded by lab services head

Life sciences

McMullen, who’s also currently president of Agilent, is set to abdicate both roles on May 1, according to an announcement the company put out Wednesday afternoon. From there, McMullen will spend a few months serving as an advisor to Agilent and to his successor until his retirement becomes final on Oct. 31.

February 25, 2024

AstraZeneca completes Gracell Biotechnologies acquisition for $1.2bn

Life sciences

AstraZeneca has concluded its acquisition of China-based clinical-stage biopharmaceutical company Gracell Biotechnologies for $1.2bn. The acquisition, initially agreed in December 2023, positions Gracell as a wholly owned AstraZeneca subsidiary with operations continuing in the US and China.

How can we help you?

We're easy to reach