The two Big Pharma giants today announced the merger between their consumer healthcare businesses, with the joint venture (JV) set to become the global market leader in over-the-counter (OTC) products with a market share of 7.3 percent.
This move will see GSK effectively split into two separate businesses – one for prescription drugs and vaccines and another for consumer health within three years of closing the deal. The UK-headquartered GSK will take a 68 percent equity interest in the new consumer healthcare-oriented company, worth some USD 12.7 billion in sales according to a GSK press release, with the American Pfizer making up the remaining 32 percent.
Having faced calls from investors to split the group for a number of years, GSK – through this new JV – now seems set to establish itself as the world’s leading OTC company. Michael Hewson of CMC Markets UK stated, “This announcement seems to be the next brick in the wall of CEO Emma Walmsley’s plan to cement Glaxo’s position in this particular (OTC) space, having already bought out Novartis’ stake in a similar venture earlier this year, while also offloading its Horlicks (drink) business.”
Established OTC brands that fall under the JV’s scope include Sensodyne toothpaste, the anti-inflammatory Voltaren and Panadol paracetamol (GSK) along with ibuprofen Advil, Centrum vitamins and calcium supplement Caltrate (Pfizer). This deal resolves Pfizer’s OTC conundrum after a failed attempt to sell its consumer healthcare division earlier in 2018.