GSK cancels sale of established products
pharmafile | December 5, 2014 | News story | Medical Communications, Sales and Marketing | FDA, GSK, Paxil, Seroxat, Zantac, bribery, cuts, imitrex
GlaxoSmithKline has decided not to sell off several of its ageing brands in the face of continuing business problems.
The pharma giant began considering the divestment in July after its disappointing second quarter results. Since then it says it has received a number of bids from various firms.
“The company has evaluated all bids received and has concluded, consistent with its key criteria of maximising shareholder value, not to pursue divestment of these products,” GSK says in a statement.
The sale would have included the European and North American rights to around 50 drugs that are facing increasing generic competition. GSK would have kept the rights in emerging markets where those medicines are still growing.
The portfolio includes the migraine treatment Imitrex (sumatriptan), heartburn medicines Tagamet (cimetidine) and Zantac (ranitidine), and antidepressants Seroxat (paroxetine) and Paxil (paroxetine).
Some of these treatments have courted controversy in the past – earlier this year Seroxat and Paxil were the targets of an FDA warning relating to manufacturing problems, and Seroxat has previously faced safety concerns.
But together the drugs in the portfolio had annual sales of around $1.6 billion and the deal was valued at over $3 billion.
Struggling business
It has been a tough year for the UK’s biggest drug maker. It continues to be dogged by bribery allegations in several countries, most notably in China, where it has been fined $490 million for corruption.
With its respiratory business struggling in the US, the company has also recently announced that hundreds of jobs will be cut at its facility in North Carolina, with reports suggesting it could affect up to 900 people.
Pushed yesterday for more details on the numbers involved, GSK said: “We don’t know precisely how many employees will be affected. We’re looking to minimize job losses through measures such as recruitment freezes and not filling vacant roles.”
GSK is also in the midst of a multi-billion dollar asset-swap deal with Novartis that will include the selling-off of its oncology business to the Swiss firm for a maximum of $16 billion.
George Underwood
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