A healthy GSK Consumer may not need Pfizer infusion

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A healthy GSK Consumer may not need Pfizer infusion

By Michael Johnsen - 02/12/2018
With the release of year-end financials next week from Reckitt Benckiser, the picture on who is still in the running as a potential suitor to Pfizer's Consumer Healthcare business may come into better focus. Last week, it appeared that the other rumored front-runner GSK Consumer Healthare may be nonchalant to the possibility of a Pfizer Consumer acquisition.

Pfizer's consumer health division is expected to sell for as much as $20 billion, according to reports.

"I will reiterate what I’ve said previously - first of all, you would expect us to take a serious look at any major assets that come up in the market," Emma Walmsley, GlaxoSmithKline CEO, told investors when asked about the Pfizer Consumer sale. "This is an attractive business. We are a world leader in consumer healthcare and we have a good track record of integrating businesses effectively, but our first priority remains pharma and both investing in the launches and the execution that we have underway, but also more specifically prioritizing the pipeline within pharma. We will not do anything that cuts across that prioritization."

So the Pfizer Consumer acquisition is not on the "need-to-do list" Walmsley said.

But Pfizer's strength in OTC pain relief may be a good fit against the portfolio of GSK Consumer Healthcare, particularly for Voltaren, a prescription-only topical pain reliever that in the past has been speculated as a possible Rx-to-OTC switch candidate. Just this past quarter, GSK Consumer Healthcare launched Voltaren No-Mess launching in Germany, the company's largest Voltaren market.

"In consumer healthcare, we saw improving sales momentum throughout the year with strong performances in wellness and oral health offsetting the impact of a weak U.S. season and competitive pressures in allergy," Walmsley said. "Our power brands continue to deliver strong growth above market levels, and this has helped drive margin improvements."

Specifically, GSK's consumer division generated $9.6 billion for fiscal 2017, up 2% on a constant exchange rate. GSK Consumer Healthcare's power brands were all growing at high single digits over the company's fourth quarter ended, added Brian McNamara, GSK Consumer Healthcare CEO. "We benefited from an earlier and more severe cold and flu season in the U.S., but importantly our Theraflu brand is growing well ahead of the market. We also are seeing share growth back on Flonase in the U.S. as we anniversary the private label entry," he said. "Overall, I feel really good about the health and momentum in the business."