GSK and Pfizer Launch Joint Venture to Become a Global Leader in Vaccines and Consumer Healthcare

VCBeat (WeChat Official Account: vcbeat) learned from foreign media that on May 24, U.S. local time, the CCI announced its approval of the joint venture established by the biopharmaceutical company Pfizer and the healthcare company GlaxoSmithKline (hereinafter referred to as GSK). Emma Walmsley, CEO of GSK, will serve as the CEO of the new joint venture until her departure.

In December 2018, GSK announced that it had reached an agreement with Pfizer to merge their consumer healthcare businesses and establish a new joint venture. According to estimates by authoritative agencies, the new joint venture would generate total sales of approximately $12.7 billion. Under the terms of the deal, GSK would hold a 68% controlling stake, while Pfizer would hold a 32% stake. The transaction was expected to be completed in the second half of 2019, subject to approval by GSK shareholders and various antitrust regulators.

GSK will leverage its recently raised capital to establish this new healthcare business entity, thereby creating greater shareholder value for the company. The proposal also supports GSK’s vigorous expansion of its pharmaceuticals division in the coming years to boost cash flow. Meanwhile, GSK plans to spin off its consumer healthcare business, paving the way for broader growth opportunities in its next phase of investment in the healthcare channel sector.

The newly established joint venture combines the flagship products of both companies, including GSK’s Sensodyne, Voltaren, and Panadol, as well as Pfizer’s Advil, Centrum, and Caltrate. Management aims to position the new joint venture as a leader in the fields of analgesics, respiratory supplements, vitamin and mineral supplements, digestive health, OTC skin health, and therapeutic oral health, while focusing on expanding its vaccine pharmaceutical business to increase market share.

Furthermore, the joint venture plans to expand its business into multiple countries and regions, including the United States, Europe, China, India, and Western Australia.

GSK CEO Emma Walmsley stated, “Eighteen months ago, I established clear corporate priorities and a capital allocation framework for GSK to enhance the company’s long-term competitiveness and strengthen our operational capabilities, with the aim of delivering innovative medicines and better healthcare products to people worldwide. The transaction announced today represents an excellent opportunity to accelerate this objective, and our collaboration with Pfizer will create greater value for shareholders. Meanwhile, the increased cash flow and the separation of the pharmaceutical business will further support our business expansion and expedite our transformation process.”

GSK, founded in 1929 and headquartered in London, UK, is a science-led global healthcare company dedicated to developing innovative medical solutions for the treatment of HIV, tuberculosis, and malaria.

Pfizer, founded in 1849 with a history spanning over 160 years and headquartered in New York, USA, is currently the world’s largest research-based biopharmaceutical company and a Fortune Global 500 enterprise. Pfizer’s portfolio covers a broad and highly promising range of therapeutic and health areas, including chemical drugs, biologics, vaccines, and consumer healthcare products, with its outstanding R&D and manufacturing capabilities ranking among the most advanced globally.

(Compiled by Liu Yujing)