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Glaxo, Pfizer Executives Out of Step on Consumer Unit’s Future

Riley Griffin

(Bloomberg) -- U.K. drugmaker GlaxoSmithKline Plc hasn’t made plans to pursue an initial public offering of the consumer-health company it set up with Pfizer Inc. last year, a top executive said, distancing himself from remarks made by Pfizer’s chief executive a day earlier.

The comments could expose a lack of communication between the two partners. Pfizer’s Chief Executive Officer Albert Bourla yesterday said he expected Glaxo to pursue an IPO in three to four years.

“This is the time that we will be able to exit from this partnership, and I’m sure that this business will have a fantastic IPO,” Bourla said at the J.P. Morgan Healthcare Conference in San Francisco.

An IPO isn’t the only option, said David Redfern, Glaxo’s chief strategy officer, in an interview at the meeting. Glaxo said at the time of the deal that it would separate and list the company within three to five years.

“Actually we haven’t decided anything,” Redfern said Wednesday. “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.”

Both Glaxo, the majority owner, and Pfizer, which has about a third of the business, are looking to focus on drug development. Recent shifts in the health-care business and in the broader economy have challenged a model in which drugmakers control every corner of home medicine cabinets.

Redfern said the consumer business needed to focus on integration and growing sales, not a spinoff or IPO.

“We don’t want it too distracted right now thinking about capital markets,” he said. “Whether it’s an IPO or just a straight spin, all options are on the table. We’ve literally had no discussion” with Pfizer on that topic.

With annual sales of about $13 billion, the consumer venture has brought under one roof Advil painkillers, Tums stomach tablets, Sensodyne toothpaste and Nicorette gum.

The world’s biggest supplier of over-the-counter medicines will be one of the industry’s only standalones, facing off with companies integrated into larger entities such as Johnson & Johnson, Bayer AG and Procter & Gamble Co.

--With assistance from Mark Schoifet.

To contact the reporter on this story: Riley Griffin in New York at rgriffin42@bloomberg.net

To contact the editor responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net

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