Today's report-GlaxoSmithKline integrates Novartis business to save itself
For GlaxoSmithKline, who is in the top spot in the global consumption of health care products and is suffering from bribery scandals and declining performance, this deal with the same sick Novartis is also the beginning of saving itself.
On April 22, Novartis Pharmaceuticals agreed to acquire GlaxoSmithKline's oncology drugs for $ 14.5 billion, and Novartis sold the vaccine business to GlaxoSmithKline for $ 7.1 billion plus patent royalties. In addition, the two parties agreed to integrate Novartis ’over-the-counter medicine business to form a new joint venture company, with GSK holding 63.5% of the controlling interest. GlaxoSmithKline said the transaction is expected to be completed in the first half of 2015.
Analysts pointed out that the decline in performance is the main reason for this time Glaxo has agreed to sell the business.
GlaxoSmithKline ’s fourth-quarter and full-year 2013 financial reports show that the company ’s global revenue increased by only 1% year-on-year to US $ 42.4 billion last year. In particular, GlaxoSmithKline's business in China is still declining. The financial report shows that the company's China business fourth-quarter sales of drugs and vaccines fell by 18% year-on-year. Public data shows that among multinational pharmaceutical companies, Johnson & Johnson sales in 2013 were 71.312 billion US dollars, Novartis sales were 57.92 billion US dollars, and Pfizer sales were 51.548 billion US dollars. In US dollars, Roche's sales were 52.307 billion US dollars. Among them, the performance of Novartis Pharmaceuticals was not satisfactory, and sales in 2013 increased by only 2% over 2012. "The three-part transaction accelerates our strategy to create sustainable, extensive purchase and sales growth and increase long-term profitability to increase shareholder value." Andrew Glaxo, Chief Executive Officer of GlaxoSmithKline, said on the 22nd that with the completion of the transaction, Gland Su Shi will become the global leader in consumer health products, with total revenue of 10.4 billion US dollars in this area. GlaxoSmithKline believes that this transaction is expected to increase the company's annual operating income of 2.08 billion to 41.6 billion U.S. dollars, fundamentally reshaping the revenue base of GlaxoSmithKline. These revenues include 62% of pharmaceutical splits, 24% of consumer healthcare, and 14% of vaccines. The transaction will also save GlaxoSmithKline $ 16 billion annually. "These estimates are subject to further detailed post-implementation statistics. Potential cost savings will come from reducing sales and administrative expenses, removing overlapping infrastructure, and reducing third-party contracting through improved manufacturing costs. New GlaxoSmithKline also Expect to benefit from the new economies of scale and earn higher returns from leveraging sales, distribution and opportunities in its broader global sourcing platform. "GlaxoSmithKline said. In addition to the decline in performance, GlaxoSmithKline has also been negatively affected in the past year. Following the medical bribery incident that was exposed in China last year, the medical bribery incident has recently been exposed in some regions of the world. On April 14, GlaxoSmithKline was accused of selling its anti-asthma drugs by bribing local doctors in Poland from 2010 to 2012. Prosecutors in the Lodz region of Poland have obtained evidence of bribery from the British pharmaceutical company in at least 12 medical centers. Poland's Central Anti-Corruption Bureau also said on the 14th that 13 people involved are under investigation.
On April 16, GlaxoSmithKline announced an investigation of corruption allegations against employees of Jordan and Lebanon branches. Prior to this, they had conducted investigations into corruption in Iraq and other countries. Among the investigations conducted on Iraq branches, there were about 60 The person was charged. Although GlaxoSmithKline said it would also purchase Novartis' new production bases in India and China. But GlaxoSmithKline with the new brand will not have a good time in China.
On April 22, the Beijing Municipal Health and Family Planning Commission issued the "Implementation Opinions on Bad Commercial Bribery Records in the Field of Pharmaceutical Purchase and Sale in Beijing", which stipulates that once pharmaceutical companies enter this blacklist, their products will be rejected by public hospitals at least within two years "Doctors with serious bribery behaviors will be revoked their practice certificates, or they will be held accountable. With the deepening of medical reform, many provinces will issue similar documents.
However, the transaction between GlaxoSmithKline and Novartis also brought a little life to the hazy European pharmaceutical market. GlaxoSmithKline committed to plan to allocate $ 6.4 billion in return to shareholders and continue to implement the B share plan. GlaxoSmithKline will not make any further share repurchases in 2015.
Affected by this good news, GlaxoSmithKline's stock price rose from $ 52.51 on April 17 to $ 55.44 on April 23, up 5%.
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