GSK sells off OTC products
pharmafile | March 16, 2012 | News story | Sales and Marketing | GSK, OTC, Omega Pharma, Zantac
GlaxoSmithKline has shed more of its non-core consumer health OTC products in a £391 million sale, including a German manufacturing plant, to Omega Pharma.
The Belgian firm is buying GSK brands including Lactacyd, Abtei, Solpadeine, Zantac, Nytol and Beconase, which had combined sales of £185 million in Europe last year.
The plan is that the deal will go through by June, subject to regulatory approval, with GSK expecting to make a profit of £190 million after tax.
Omega will be taking on the Herrenberg manufacturing site, where a number of the brands are made. GSK’s 110 staff there are expected to transfer to Omega.
“Given the continued economic challenges across the Eurozone, I am pleased that we have been able to transact these assets at a good price for GSK,” said Simon Dingemans, chief financial officer at GSK, in a note to the London Stock Exchange.
“The objective of this divestment process is to generate attractive returns for shareholders as well as simplifying our ongoing consumer business and enabling it to focus on its priority brands and markets,” he added.
These OTC priorities include smoking control, denture care, dental sensitivity, analgesics and nutrition, with brands such as Sensodyne, Panadol and Horlicks.
GSK announced plans to offload products, with total sales of £500 million, a year ago and completed the sale of a raft of US and Canadian brands in January.
Prestige Brands Holdings paid £426 million for the North American portfolio, which translates into net cash proceeds of £242 million for GSK.
Meanwhile, GSK’s search for a buyer for the global rights to its OTC weight loss drug Alli (orlistat) has hit a snag.
GSK insists this is still on the agenda. But in a statement it said: “Pending the resolution of a temporary third party supply interruption, the process to divest Alli has been delayed.”
Tipped to be a blockbuster at launch in 2007, Alli failed to meet expectations. It is a milder form of Roche’s prescription drug Xenical, but both versions have come under scrutiny for their safety profile due to the potential for severe liver injury.
GSK says it is also in ‘active discussions’ to sell off the remaining OTC brands it does not want, which brought in £60 million in 2011, in markets outside Europe and North America.
GSK’s divestment programme will see 130 jobs lost over the next three years at a site in Waterford, Ireland, and the sale of US OTC production units in Tennessee and South Carolina.
Adam Hill
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