GlaxoSmithKline diversifies supplements portfolio through joint venture with Pfizer

By Adi Menayang

- Last updated on GMT

Pfizer World Headquarters in Manhattan. Image: Coolcaesar/Wikimedia Commons
Pfizer World Headquarters in Manhattan. Image: Coolcaesar/Wikimedia Commons

Related tags Pfizer Glaxosmithkline

Pfizer and GlaxoSmithKline are merging their consumer health units, bringing the two pharma giants’ dietary supplement and over-the-counter brands into what analysts are calling “the world’s largest consumer health company.”

GlaxoSmithKline, or GSK, will have a majority controlling equity interest of 68% and Pfizer will have an equity interest of 32% in this joint venture.

It will bring brands like Pfizer’s Centrum and Caltrate with GSK’s Panadol and Sensodyne into one new unit. The companies said that the joint venture will be “a category leader in Pain Relief, Respiratory, Vitamin and Mineral Supplements, Digestive Health, Skin Health and Therapeutic Oral Health.”

According to Matthew Oster, head of consumer health at market data company Euromonitor International, the combined consumer health divisions will make up 6% of the global consumer health market.

This deal will also expand GSK’s consumer health portfolio from pure OTC drugs toward what Oster described as “the faster-growing vitamins and dietary supplements categories, where Pfizer plays more actively,” ​he wrote in an email statement to the media.

More than half of Pfizer’s global consumer health sales come in the form of vitamins and dietary supplements, while 95% of GSK’s consumer health sales fall in OTC drugs, according to Euromonitor data.

“This will allow the new merged company take advantage of changing consumer trends around healthy living that are driving interest in vitamins and dietary supplements and will give them a competitive boost in diversifying away from a pure OTC portfolio,”​ Oster added.

New unit will have more than US$100 million in retail sales

“This deal makes sense on a number of fronts. It brings together a number of global megabrands under one roof, from GSK’s Panadol and Voltaren to Pfizer’s Advil, Centrum and Nexium; together the company will house 25 consumer health brands with more than US$100 million in annual retail sales,”​ Oster said.

“It also marks a logical end to the rumors about Pfizer’s underperforming consumer health division, which had been reported to be on the block off-and-on for the last couple years,”​ he added.

Pfizer started exploring selling its consumer healthcare business in Oct 2017​.

Meanwhile, GSK hinted in March this year that it will consider selling its nutrition portfolio after its buyout of Novartis in a joint venture of OTC products​.

Commenting on this latest joint venture with Pfizer, Oster added: “GSK has [been] able to show steady growth in a consumer health marketplace where many of the leading players, like Pfizer, have seen recent difficulties. It also makes sense in terms of the new company’s geographic portfolio, with Pfizer’s well-built presence in the US complementing GSK’s leading position in Western and Eastern Europe and the Middle East and Africa.​"

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