The Financial Times has published between yesterday and today a series of articles about the recent decision by the major shareholders of GlaxoSmithKline’s to explore splitting the UK-based pharma group into two. The company’s shareholders have considered that creating two independent units–Consumer Health and Pharmaceuticals–would increase their financial return and would probably result in an easy sale of the Consumer Health division as well. The asset is worth at least $22bn, that is 30% of GSK’s capitalization.
It is remarkable that the investors’ request comes at this stage, as CEO Emma Walmsley has managed to change the course of the company, with shares rising by over 18% YTD (London). Moreover, she has forced a R&D project rationalization and has increased the R&D investment to a record $5bn. However, Walmsley’s most drastic move has been acquiring the JV Consumer Health from Novartis for $13bn. The market has welcomed the move, since controlling the division secures steady cash inflow without the financial performance oscillations that, instead, characterize the pharma market.
The financial community apparently appreciates that GSK is planning to split the historical group into two, indeed its shares yesterday increased 3%, in a very hard day for the sector.