GlaxoSmithKline to spin-off its consumer healthcare business

GlaxoSmithKline plc (LON: GSK) said on Wednesday its consumer healthcare business will be spun off into a separately listed company. The demerger that was originally announced in December 2018 will eventually result in an $11 billion payment for GSK.

Following the separation scheduled for mid-2022, GlaxoSmithKline will focus on its pharmaceutical business that took a hit last year as the COVID-19 crisis made patients defer treatments.

CEO Emma Walmsley’s remarks on CNBC’s “Squawk Box”

Commenting on the news, CEO Emma Walmsley said on CNBC’s “Squawk Box”:

The chief executive further highlighted that GlaxoSmithKline is now committed to an over 5% and an over 10% growth in sales and profit, respectively, by 2026. By the end of the decade, the world’s largest vaccine maker wants to hit the milestone of £33 billion in sales.  

Walmsley confirmed that the new GSK will pay 80 pence per share of dividend this year, and the separated consumer healthcare company is likely to pay dividend in the range of 30 to 50 pence per share.

European pharmaceutical analyst says GSK lacks focused investments in R&D

Emily Field, head of European pharmaceuticals at Barclays, also joined CNBC’s “Street Signs Europe” on Wednesday. Commenting on GSK’s announcement, she said:

GlaxoSmithKline was about 3.5% up in the stock market on Wednesday morning. The NYSE-listed shares of the pharmaceutical giant have recovered close to 20% from the year-to-date low of $33.61. At the time of writing, it is valued at about $97 billion and has a price to earnings ratio of 13.41.