GlaxoSmithKline Divests Brands in Australia for $271 Million
GlaxoSmithKline (GSK) is selling the majority of its ‘classic brands’ in Australia to Aspen Global for approximately £172 million ($271.1 million) in cash. The move is part of GSK’s ongoing strategy to simplify business by selling low-growth and noncore assets in order to focus on priority brands, products and pipeline opportunities.
The divested brands comprise 25 products that have been genericised or that are no longer promoted by the company, including the herpes medicine Valtrex, beta-lactam antibiotic Timentin, and the epilepsy and bipolar drug Lamictal. The brands generated around £83 million ($130.8 million) in total sales in 2011 and £31 million ($48.9 million) in the first half of 2012. In a statement, GSK explained that revenues for the products had gradually declined in recent years because of “local market price reductions and generic competition”.
However, Aspen added in a statement, “Whilst the Products received little promotional focus from GSK, Aspen is confident that it will be able to leverage its proven ability to reinvigorate older brands and the Products’ considerable brand equity in order to enhance the value of the portfolio.”
The divestment is expected to be completed in the fourth quarter of this year, subject to regulatory approvals.
Earlier this year, GSK divested several over-the-counter brands in select territories to Aspen for approximately $264.7 million.