Mergers And Acquisitions, Health Care İndustry, Markets, Biotech And Pharmaceuticals, Glaxosmithkline Plc

Mergers And Acquisitions, Health Care İndustry

GSK chief vows 'step change in growth' as consumer business is split off

GSK chief vows 'step change in growth' as consumer business is split off

6/23/2021 4:07:00 PM

GSK chief vows 'step change in growth' as consumer business is split off

British pharmaceutical giant GlaxoSmithKline faces a crunch meeting with investors after announcing a new strategy for the next decade.

Key PointsThe new core drug and vaccine division, which CEO Emma Walmsley has dubbed "New GSK," has set targets of 5% sales growth and 10% profit growth between now and 2026.The separate consumer health business, comprising brands like Panadol and Sensodyne, will be demerged with "at least 80%" of the value being returned to shareholders.

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View of the headquarters of the British pharmaceutical company GlaxoSmithKline in west London.Ben Stansall | AFP | Getty ImagesLONDON — British pharmaceutical giantGlaxoSmithKlinefaces a crunch meeting with investors on Wednesday after announcing a new strategy for the next decade centered on the splitting off of the company's substantial consumer products arm.

The new core drug and vaccine division, which CEO Emma Walmsley has dubbed "New GSK," has set targets of 5% sales growth and 10% profit growth between now and 2026. The separation is expected to take effect in mid-2022.GSK is also aiming for more than £33 billion ($46.2 billion) worth of sales by the end of the decade, which it hopes will offset the loss of exclusivity over HIV medication dolutegravir in 2028. headtopics.com

Investors have reacted positively to the plans thus far, with GSK shares up 3% by mid-afternoon trade in Europe.However,Walmsley will need the backing of investorsat the company's Capital Markets Day, having been under pressure of late from U.S. activist investor Elliott Management. The virtual session begins at 2 p.m. London time on Wednesday.

Walmsley told CNBC's "Squawk Box Europe" on Wednesday that the separation of the business was a "step change in growth" and the culmination of a four-year transformational plan, aiming to address "perennial underperformance" in the business.

"This growth is all about a quality vaccines and specialty medicines portfolio, and that is really core to the strategy of New GSK, being focused on prevention of disease as well as treatment," she said."It's about setting out New GSK as a growth company with new ambitions for shareholders, but also our chance to impact positively the health of 2.5 billion people over the next decade."

Read more: CNBC »

GSK pledges sales boost after split from consumer armNew GSK (GSK.L), the pharmaceuticals business being separated from its consumer health operations, pledged to increase sales by more than 5% a year to 2026, the group said on Wednesday, as it published details of the split.

GSK pledges sales boost after split from consumer armNew GSK (GSK.L), the pharmaceuticals business being separated from its consumer health operations, pledged to increase sales by more than 5% a year to 2026, the group said on Wednesday, as it published details of the split.

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