The two companies joined their consumer health businesses in order to give the parent companies more maneuverability to focus on the pharmaceuticals.
Pfizer and GlaxoSmithKline do not seem to be on the same page as they move forward with the formation of a joint consumer healthcare business.
At the JP Morgan Healthcare Conference, Pfizer Chief Executive Officer Albert Bourla indicated that the joint venture could become a publicly traded entity within the next three or four years following a separation from its parent companies. GlaxoSmithKline, on the other hand, doesn’t seem to agree with that deadline.
In December 2018, Pfizer and GlaxoSmithKline joined together to create a global healthcare company by combining the consumer healthcare business of each company. The combined global sales of the two consumer businesses are $12.7 billion. Products that will be managed by this joint company include Advil, Tums, Sensodyne toothpaste and Nicorette gum. Other products include Centrum, Caltrate and Excedrin.
When the combination of companies closed in August of last year, Pfizer and GSK said the joint venture created the world’s largest over-the-counter business. In particular, it holds the number one OTC position in the U.S. and the number two OTC position in China – the two biggest OTC markets in the world, the companies said.
The two companies joined their consumer health businesses in order to give the parent companies more maneuverability to focus on the pharmaceuticals. GSK is the majority owner of the joint venture, with Pfizer having a stake of about one-third of the business.
At JPM, Bourla said that an initial public offering was probably in the works for the joint venture within the next few years. He said, according to a Bloomberg report, that the IPO provides Pfizer a clear exit strategy.
But, one day later, GlaxoSmithKline said it doesn’t see things the same way. David Redfern, Glaxo’s chief strategy officer, told Bloomberg that nothing has yet been decided. When the deal closed in August, GSK noted that its intention was to separate the joint venture as an independent company at some point.
“When we announced the deal, we said we expect it to separate within three years, but actually up to five years. And it’s entirely our decision,” Redfern said, according to Bloomberg.
Redfern went on to say that the new consumer health business needs to focus on the integration of the products and growing sales as opposed to an initial public offering. Redfern added that there has been no discussion with Pfizer about an IPO for the consumer healthcare business or even a spinoff.
The different ideas put forth by the two companies seem to indicate a slight disconnect and a lack of communication between the leadership teams of both pharma giants.
