GSK and Pfizer’s plans for joint consumer healthcare IPO

Pfizer is planning an initial public offering (IPO) of its consumer-health joint venture with GlaxoSmithKline in 3-4 years, as the two drugmakers are looking to focus on drug development in the immediate future.

The world’s biggest supplier of over-the-counter (OTC) medicines will be one of the industry’s only standalones, facing off with companies integrated into larger entities such as Johnson & Johnson, Bayer and Procter & Gamble.

With annual sales of about $13 billion, it brings under one roof Advil painkillers, Sensodyne toothpaste and Nicorette gum.

Both Glaxo, the majority owner, and Pfizer, which has about a third of the business, are looking to focus on the research and development of innovative medicines.

Recent shifts in the healthcare business and in the broader economy have challenged the pharmaceutical innovation model. Big pharma companies are increasingly focused on developing high-priced new medicines that draw on cutting-edge research in genetics and oncology.

On the consumer-health front, online price competition and pharmacy own brands have dented margins. Both GSK and Pfizer want the consumer business to focus on integration and growing sales in the short-term, not a spinoff or IPO.

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