The United Kingdom's largest drug maker announced plans to spin off its HIV business it made with Pfizer to create a more profitable company.
GlaxoSmithKline established ViiV Healthcare together with U.S. competitor Pfizer back in 2009, fusing together their HIV research efforts. Japanese drug manufacturer Shinogi also joined in and purchased a share of ViiV Healthcare in 2012.
Andre Witty, GlaxoSmithKline Chief Executive stated that hiving off ViiV Healthcare would be a good move and would bring in "significant" capitalization because of its persistent performance.
Furthermore, Witty reiterated that ViiV could be worth almost 15 billion euros, making it of higher value compared to perfume retailer Marks & Spencer and the second-largest chain of supermarkets in the U.K, Sainsbury's combined.
He also remains confident that ViiV will do well despite of the current failing market performance in the Eurozone causing companies to back down on their spin off plans.
"The beauty of ViiV is that it is at the beginning of an extraordinary growth run and so I don't feel under any acute pressure that it has to be done by a certain dry of the week. We can be very thoughtful about market conditions," Witty said.
ViiV Healthcare amassed 373 million euros in the most recent quarter, and reported an 18 percent growth in sales in the same period compared to last year.
ViiV recently offered new HIV medicines, Tivicay and Trumeq which arrived last year and what were considered to be "one of the most successful new product launches in the category" according to the CEO.
Aside from the two drugs, ViiV also offers 11 other HIV medicine, with one other in clinical trials.
Meanwhile, GlaxoSmithKline said that the motive for the spin-off was to cut down on costs over the next three years (1 billion euros). Also, the pharmaceutical giant said that the savings would compensate for the low sales of their lung medicines.
