GSK Proceeds with Stake Monetization in Haleon as Part of Disciplined Approach

British pharmaceutical giant GlaxoSmithKline (GSK) is adhering to its strategic plan to gradually monetize its stake in Haleon, the consumer health business that was spun off in 2022. According to a recent securities filing to the London Stock Exchange, the company has successfully raised about $1 billion by selling 300 million shares in Haleon.

The sale represents approximately 3.2% of Haleon's total ownership, leaving the company with a reduced stake of around 4.2% in the Advil maker. This move aligns with GSK's initial objective of focusing on innovative drugs by separating from its consumer health business. The demerger of Haleon in July 2022 initially left the company with a 13% stake.

Become a Subscriber

Please purchase a subscription to continue reading this article.

Subscribe Now

Its decision to reduce its interest in Haleon has been anticipated, as the company aims to strengthen its balance sheet through a disciplined and pragmatic approach to further sales. A GSK spokesperson stated that the company will continue to assess market conditions for future stake sales.

Haleon, known for brands like Advil, was a joint venture between GSK and Pfizer. Following the demerger, Pfizer holds a 32% stake in the new firm's shares. Pfizer has not sold its stake but plans to do so gradually to avoid significant fluctuations in Haleon's share price.

Both GSK and Pfizer have committed to not selling any Haleon shares in the next 60 days following GSK's recent sale. Meanwhile, both pharmaceutical companies have been actively bolstering their pipelines through strategic deals. The company's recent acquisitions include a $2 billion investment in Bellus Health for a late-phase chronic cough candidate and a $1 billion upfront payment for Aiolos Bio, securing a long-acting asthma candidate.

GSK's capital allocation priority remains investing in pipeline delivery, combining organic efforts with targeted business development. The company's CEO, Emma Walmsley, emphasized the commitment to generating 6% to 8% annual compounded sales growth between 2021 and 2026, driven by new medicines and vaccines. Notable initiatives include an RSV vaccine showdown with Pfizer and a myelofibrosis market battle with Incyte.

Meanwhile, Pfizer has made significant moves, including a $43 billion investment in ADC specialist Seagen and implementing a massive cost-cutting program to adapt to the decline in COVID product sales, aiming to save $4 billion by the end of 2024.

As GSK proceeds with its disciplined approach to monetizing its stake in Haleon, the pharmaceutical landscape continues to evolve with companies strategically positioning themselves for growth and innovation in drug development and commercialization.