GlaxoSmithKline has decided to divest its non-core OTC brands to focus more on its Consumer Healthcare business around a portfolio of fast-growing priority brands and the emerging markets. The products to be divested, which are primarily sold in Europe and the United States, had sales in 2010 of approximately £500 million, 10 per cent of GSK’s total Consumer Healthcare turnover. They include analgesics Solpadeine, BC and Goody’s; vitamin and supplement product Abtei; feminine hygiene treatment Lactacyd; and alli for weight management.

Individually, the brands to be divested have strong heritage and good prospects, but GSK has lacked sufficient critical mass in some product categories and certain brands have lacked focus due to other global priorities. GSK therefore believes that other companies are better placed to maximize the potential they offer.

The process of communicating with interested parties will begin over the next few weeks, with the aim of divesting the products by late 2011, subject to interest and realizing appropriate value for shareholders.

Following the divestment, GSK’s Consumer Healthcare business will focus on three priority categories: Oral Health, Wellness/OTC and Nutrition, in which the company has fast-growing leading brands such as Sensodyne, Panadol and Horlicks.  On a pro forma basis, the retained business delivered sales of approximately £4.5 billion in 2010, and grew at 6 per cent  CAGR over the period 2007-2010. The refocused business will hold market-leading positions in Smoking Control, Denture Care, Dental Sensitivity, Analgesics, and Nutrition.   

Commenting on the proposed divestment, CEO of GSK Andrew Witty said: “Consumer Healthcare is a key growth driver for GSK. But it is important that we focus this business around product categories, brands and markets where we have most depth and competitive advantage, with the best prospects for strong growth. This divestment is also an example of our commitment to focus on realizing value and enhancing returns to shareholders.”

Brands to be divested include the following products with sales of more than £5 million per annum.  The intention is to divest these products in all markets in which they are sold by GSK: Abtei, Alli, Goody's, Granufink, Beano, BC, Lactacyd, Libenar, Nytol, Beconase, Phillips MOM, Debrox, solpadeine, Dequadin, Tagamet/Stomedine, Ecotrin, Valda, FiberChoice and Zantac.