GSK DRUG UNIT TO GET $11B BOOST FROM CONSUMER SPIN-OFF

GSK set out plans on Wednesday to turn its consumer healthcare arm into a separately listed company, in a move that will deliver an 8 billion pound ($11 billion) windfall and other financial benefits for its underperforming drugs business, Pushkala Aripaka and Ludwig Burger reported for Reuters.

Investors have been waiting for details of the separation, which was first unveiled in December 2018 when GSK agreed to a joint venture for consumer brands such as Sensodyne toothpaste and Advil painkillers with Pfizer.

The British group also gave details of a research pipeline which it says has benefitted from the restructuring work of chief scientist Hal Barron, but said it would pursue deals as well to further improve its drug development prospects.

The split planned for the middle of next year will allow GSK to focus on its core drugs and vaccines business, which has been hit by a lack of fast-growing products and patients deferring treatments due to the COVID-19 pandemic, weighing on its shares.

Despite being the world's biggest vaccine maker by sales, GSK has also been beaten by the likes of Pfizer, Moderna, and AstraZeneca to making a COVID-19 vaccine.

"I am very aware that GSK shares have underperformed for a long period," CEO Emma Walmsley told a news conference, adding she would stay at the helm of the pharma and vaccines business called New GSK.

"Together, we are now ready to deliver a step-change in growth for New GSK and unlock the value of Consumer Healthcare," said Walmsley, who has been in charge since 2017.

Pressure has been increasing on the CEO following a report in April that activist investor Elliott had taken a multibillion-pound stake in GSK. The company is currently valued at about 10.3 times its forecast core earnings, including net debt, below an average of more than 12 for global pharma majors, Refinitiv Eikon data shows.

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