GlaxoSmithKline (NYSE:GSK) weight loss drug alli and 18 other over-the-counter products will be sold as the pharmaceutical giant pares down its consumer healthcare business.
London-based GSK, which has its U.S. headquarters in Research Triangle Park, North Carolina, said Thursday that it will begin talking with potential buyers of those products in the next few weeks with the goal of divesting them by the end of the year, depending on buyer interest. Other products identified include analgesics Solpadeine, vitamin and supplement product Abtei, and feminine hygiene treatment Lactacyd.
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GSK had announced its plans to divest “non-core consumer assets” in February when it discussed its fourth-quarter 2010 financial results. The consumer OTCs being put up for sale comprised just 10 percent of the company’s consumer healthcare revenue. GSK said it is not abandoning consumer products, but will instead focus on fast-growing “priority brands” as well as products sold in emerging markets. The OTCs being divested are sold primarily in Europe and the United States.
Going forward, GSK’s consumer efforts will now focus on oral health, over-the-counter wellness products and nutrition. In those categories, GSK owns market-leading products in areas such as smoking control, dental sensitivity and nutrition.
The OTC pullback is affecting GSK’s U.S. manufacturing operations. According to news reports, GSK’s sale of those products means the company will also sell manufacturing plants in Memphis, Tennessee and Aiken, South Carolina. The company also maintains manufacturing operations in Zebulon, North Carolina, east of Raleigh. GSK spokeswoman Malesia Dunn said that none of the OTC products on the divestiture list are made in Zebulon. GSK CEO Andrew Witty said in a prepared statement that while consumer healthcare is a key growth driver for GSK, “it is important that we focus this business around product categories, brands and markets where we have most depth and competitive advantage, with the best prospects for strong growth.”
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