- GlaxoSmithKline (GSK) has shored up its consumer health portfolio through an asset swap with Novartis which has given GSK a large portion of Novartis’s consumer healthcare products.
- The goal of GSK’s CEO, Andrew Witty, is to create a top-shelf OTC company with accelerated revenue growth.
- GSK’s stock has fallen recently in light of corruption allegations and lowered earnings forecasts.
The agreement between GSK and Novartis is worth $20 billion and was completed earlier this year. Between the two companies, the OTC portfolio will include many recognized and respected consumer brands, including AquaFresh, Nicorette, Voltarin, Excedrin, Otrivin and Theraflu. If GSK chooses to spin off this division as a stand-alone company, revenues could reach $10 billion a year.
In addition to OTC consumer products, GSK also acquired Novartis’s vaccination and oncology divisions. However, despite GSK’s optimistic focus on future acquisitions and restructuring plans, the company’s reputation has been clouded by allegations of corruption in China and other countries. Its respiratory drug, Advair, had dismal sales in the second quarter. GSK's stock is down 10% this week compared to last week.