Connecting to LinkedIn...

W1siziisijiwmtuvmdqvmtuvmdgvntqvmzgvnzi1l01ptlrbu0hfqkxpr19vtljftkrfukvex0lnqudfx3jlc2l6zwrfyw5kx3jlbmrlcmvklmpwzyjdlfsiccisinrodw1iiiwimtkymhgxmjuwiyjdxq

Blog

Pharmaceutical shares soar after Novartis and Glaxo deal

25/04/2014 by

W1siziisijiwmtqvmtavmjgvmtuvndqvmjevmzqyl2zpbguixsxbinailcj0ahvtyiisijywmhg0mdbcdtawm2uixv0

Britain’s Glaxo Smith Kline and Swiss rival Novartis have agreed a multi-billion dollar swap of assets in a move that led to a rally in pharmaceutical stocks as investors bet on a renewed burst of deal making across the sector.

The two drug companies will join forces in the consumer healthcare sector to combine brands including Aquafresh, Beechams and Tixylix, while exchanging their oncology and vaccine businesses.

The deal comes amid a frenzy of takeover speculation in pharmaceuticals with the US drugs group Pfizer reportedly considering a $100bn (£60billion) bid for Britain’s AstraZeneca, while Canadian group Valeant Pharmaceuticals on Tuesday confirmed a $46.5bn move for Allergan, the California-based maker of Botox.

Shares in GSK rose 5.2% to £16.40 and Switzerland’s Novartis rose 2% to 76.40 Swiss francs (£51.28). AstraZeneca rose nearly 4.7% and the UK’s Shire jumped 4% to £30.60 on hopes of more deals to come, with the FTSE100 index climbing nearly 1%.

GSK shareholders will benefit from a £4bn capital return funded by net proceeds of $7.8bn from the Novartis deal, in which the Brentford-based firm is selling its oncology business to Novartis for $16bn and purchasing its new partner’s vaccine business for an initial $5.25bn. A further $1.8bn is promised to Novartis if the vaccines division performs well. Novartis, meanwhile, is selling its animal health division to US pharmaceutical company Eli Lilly for $5.4bn.

Sir Andrew Witty, the GSK chief executive, said the complex deal had taken months to agree but was a step on from the mega-mergers of the past under which firms might gain two or three useful businesses alongside seven or eight unwanted elements which could distract attention from developing its core business. “I believe if you really focus the transaction on just the things you really care about you can create tremendous value in that space,” Witty said.

“Opportunities to build greater scale and combine high quality assets in vaccines and consumer healthcare are scarce. With this transaction we will substantially strengthen two of our core businesses and create significant new options to increase value for shareholders,” he added.

The combined consumer healthcare business will house 19 brands, including Panadol and Nicotinell, with sales of more than $10bn worldwide in what Witty described as a “powerhouse in over-the-counter products”. Witty added that the deal strengthened GSK’s global leadership in the vaccines market, increased its scale in consumer health products and would deliver immediate sales and earnings benefits once completed in early 2015. GSK will continue to develop experimental cancer treatments and could market these itself in future, although Novartis will have first refusal if it decides to seek a partnership with a third party.

Savvas Neophytou, an analyst at Panmure Gordon, upgraded GSK to a buy as he said the deal was a sensible move away from “white tablet” pharmaceuticals and the lacklustre oncology business after a tricky few weeks for the company, which has been embroiled in corruption allegations. “Today’s transaction shows management will not sit idly by waiting for the pipeline to mature but will take brave decisions to unlock shareholder value,” Neophytou wrote in a note.

This article has been extracted from http://www.theguardian.com, please click on this link to read the article in full http://www.theguardian.com/business/2014/apr/22/novartis-glaxosmithkline-deal-pharmaceutical-shares

Montash is a multi-award winning, global IT recruitment firm. Specialising in permanent and contract positions across mid-senior appointments which cover a wide range of industry sectors and IT functions, including:

ERP, BI & Data, Information Security, IT Architecture & Strategy, Scientific Technologies, Demand IT and Business Engagement, Digital and E-commerce, Infrastructure and Service Delivery, Project and Programme Delivery.

With offices based in London, Montash has completed assignments in over 30 countries and has appointed technical professionals from board level to senior and mid-management in permanent and contract roles.

For more information please visit www.montash.com

comments powered by Disqus

Social Stream

Latest News

W1siziisijiwmtcvmdevmjavmtavntyvmtkvnzgzl0nsts5qcgcixsxbinailcj0ahvtyiisijm4mhgxmdajil1d

Salesforce moves into Seattle with new engine...

2017-01-20 10:00:00 +0000

Salesforce, a world leader in customer relationship management (CRM) solutions, has revealed that it is to open an innovation and engineering hub in Seattle. In order to increase the firm’s presence in the city, Salesforce Co-Founder Parker Harris said that the office located in Bellevue’s Nine Two Nine Office Tower will focus on its artificial intelligence (AI) initiatives. One reason for the move is so that the firm can access a new pool of talent. Ta...

W1siziisijiwmtcvmdevmtgvmdkvmtqvmzmvmzk5l0vsuc5qcgcixsxbinailcj0ahvtyiisijm4mhgxmdajil1d

Sage bolsters X3 business ERP solution

2017-01-18 09:00:00 +0000

Sage, one of the global leaders in enterprise resource planning (ERP) solutions, has revealed that it has signed up a trio of new clients to its X3 business solution. With the Salesforce.com partner wanting to be able to show its ability to host larger clients, the firm revealed that BrightBridge, Atlas Cloud and CLOUT are all now utilising the new and emerging X3 ERP platform. Sage Vice President of UK Enterprise David Watts talked about the latest agr...