GSK ready to kick the tires of any Pfizer OTC divestiture
LONDON — If Pfizer follows through with its announcement last week to potentially place its consumer business up for sale, GlaxoSmithKline, presently the third-largest OTC seller in the U.S. marketplace, would certainly take a look at it, the company's CEO shared Wednesday morning.
"We did say we'd be potentially interested in building up our consumer business; it's a business we like. We're a world leader in consumer healthcare and have a demonstrated track record of successful integrations," GSK CEO Emma Walmsley, explained to investors during the comany's quarterly conference call.
"So you would expect us to look at any assets that compliment our portfolio from a power brand or geographic footprint point of view," she said. "We've been looking at it, but they only announced the process last week, so it's a bit premature and it's not even confirmed for sale to discuss in any detail if and how."
But one can wonder.
The biggest impact of any potential acquisition of Pfizer's consumer business by GlaxoSmithKline would be that company's entree into VMS. Pfizer is the market leader in liquid vitamins through its 2012 acquisition of Alacer and its Emergen-C business. For the 52 weeks ended Sept. 10, Alacer posted $168.1 million in liquid vitamin sales across total U.S. multi-outlet, according to IRI, on growth of 9.1%. And Pfizer's multivitamin Centrum brand, which contributed to $282.1 million in multivitamin sales on growth of 7.1%, is second only to Bayer's One-A-Day in that category.
The rest of Pfizer's brands would add to GlaxoSmithKline's already considerable heft in OTC: Pfizer fields Dimetapp and Robitussin in cough/cold to GlaxoSmithKline's Triaminic and Theraflu; Pfizer wields Nexium 24HR in the antacid space against GlaxoSmithKline's venerable Tums brand; in pain, it's Pfizer's Advil vs. GlaxoSmithKline's Excedrin (though the external analgesic Thermacare line of adhesive heat would be additive to GlaxoSmithKline here).
A combination of GlaxoSmithKline, its joint venture with Novartis' consumer healthcare brands and the onboarding of Pfizer's consumer business would leapfrog the company over both Bayer and Johnson & Johnson in becoming the clear market leader. According to Kline Group, based on 2016 sales Bayer had an 8.2% market share, Johnson & Johnson 7.5% and GlaxoSmithKline Consumer Healthcare 6.5%. The addition of Pfizer's 6.2% would concievably bring the combined GlaxoSmithKline business to a marketshare of 12.7%.
GlaxoSmithKline on Wednesday posted $2.6 billion in global sales, representing growth of 5%. In the U.S., GlaxoSmithKline Consumer Healthcare generated $568.7 million on growth of 1%. Private label competition across GlaxoSmithKline Consumer Healthcare's Flonase offset strong performance by the company's OTC power brands.
Without the infusion of Pfizer's OTC business, GlaxoSmithKline Consumer Healthcare expects low to middle single-digit growth through 2020, including a comparable 1% growth into next year as store brand versions of Flonase continue to impact that business.