Global pharmaceutical and healthcare company GSK is undertaking a two-year plan to split itself in two.
One company will be a biopharma company with R&D focused on science related to the immune system, use of genetics and new technologies (“New GSK”). The second, “Consumer Healthcare,” will focus on just that — consumer healthcare.
The separation plan seeks to drive a common approach to R&D across modalities with improved capital allocation; align and improve capabilities and efficiencies of global support functions to support New GSK; and further optimize its supply chain and portfolio, including divestments of non-core assets.
The plan is targeted to result in £0.7 billion of annual savings by 2022, with total costs estimated by the company of £2.4 billion.
GSK expects the plan to deliver improved operating performance, with meaningful improvements beginning 2022. The anticipated divestment proceeds are largely expected to cover the plan’s cash costs, though there will be additional one-time costs to prepare Consumer Healthcare for separation that are estimated at £600-700 million.
“In 2020, our first priority remains Innovation, to progress our pipeline and support new product launches. Recent data readouts underpin our decision to further increase investment in R&D and these new products,” said Emma Walmsley, GSK CEO. “At the same time, we are again focused on operational execution, including delivering a successful integration in Consumer Healthcare, and we are also preparing for the future, starting a new two-year program to get GSK ready for separation.
“All of this aims to support future growth, deliver significant value creation, and set up two new leading companies in biopharma and consumer healthcare, each with the opportunity to improve the health of hundreds of millions of people.”