GlaxoSmithKline culls £17bn HIV drugs float as outlook improves
PHARMA giant GlaxoSmithKline (GSK) yesterday abandoned plans for a float of its HIV medicines division.
In first quarter results published today, the company said its decision to hang on to ViiV Healthcare reflected an “updated strong positive outlook”.
Analysts at Jefferies have said ViiV could be valued at as much as £17bn on the public market, meaning had the division been spun-off, it would have been one of the largest floats in the past decade – although Glencore was valued at £38bn during its 2011 initial public offering (IPO).
GSK owns 80 per cent of ViiV – other, smaller stakes are held by rivals Pfizer and Shionogi.
Last year was a difficult one for GSK, it was forced to issue a profit warning in July thanks to falling sales, just as it was dragged into a bribery scandal in China. In February this year it appointed former RBS chairman Sir Philip Hampton to lead its board.
Yesterday GSK accelerated its cost savings plan, pushing to a target of £3bn by the end of 2017, and said it will pay investors an annual dividend of 80p each for the next three years.
That payout is down from what it expected. It said that was thanks to its asset swap with Novartis, under which it acquired its Swiss rival’s global vaccines arm, while Novartis bought GSK’s oncology unit.
GSK was cautious over revenue, with its compound growth rate likely to be in the “low-to-mid single digits” between 2016 and 2020.