GlaxoSmithKline (LON:GSK) has declared that it is interested in Pfizer’s $15-billion consumer healthcare business, The Times has reported. The news came as Britain’s biggest drugmaker updated investors on its third-quarter performance yesterday.
GSK’s share price has fallen deep into the red in London in today’s session, having given up 1.01 percent to 1,414.50p as of 12:31 BST, underperforming the benchmark FTSE 100 index which has climbed into positive territory and is currently 0.43 percent better off at 7,479.06 points. The group’s shares have lost more than 13 percent of their value over the past year, and are down by just under 10 percent in the year-to-date.
Interest in Pfizer assets
The Times reported that GSK’s new chief executive Emma Walmsley had said yesterday that the company was considering an approach for Pfizer’s $15-billion consumer healthcare business, with the move triggering concerns in the City about a possible dividend cut. The US pharma giant plans to launch an auction process next month and FTSE 100 consumer goods group Reckitt Benckiser (LON:RB) is also thought to be interested in the division, which comprises a string of over-the-counter treatments, including painkiller Advil.
“As a consolidator, in a sector that we expect to continue to consolidate, we would look at these assets […] carefully in terms of their complementarity to our power brand strategy and our geographic footprint, but it is a question of looking at them and making sure we stay focused on returns,” Walmsley pointed out, as quoted by the newspaper.
Analysts weigh in on results
The comments came as the FTSE 100 group updated investors on its third-quarter performance, posting a rise in overall revenue but flat performance in its Vaccines segment. The Financial Times quoted Jeffrey Holford of Jefferies as commenting that performance of the pharma division had been weaker than expected but this had been offset by a stronger-than-forecast performance in consumer.