Glaxo buys cancer drug firm after Horlicks sale
GLAXOSMITHKLINE boosted its cancer drugs pipeline with the £4billion acquisition of US company Tesaro yesterday, after offloading its Horlicks and other health food drinks in India to Unilever in a £3.1billion deal.
The giant UK pharma company made its first major acquisition under chief executive Emma Walmsley within hours of agreeing to sell its consumer nutrition business with the Marmite and Persil owner.
The Glaxo business, about 90 per cent of whose £490million annual sales are from Horlicks and Boost brands, will be merged with Hindustan Unilever.
Horlicks was introduced by returning Indian soldiers who had fought with the British Army in the First World War and became part of the country’s nutrition culture.
Walmsley said: “Horlicks has made a significant contribution to Glaxo and to the health of consumers across India for many decades and we believe Unilever is well placed to maximise its future potential.
“Proceeds will be used to support the group’s strategic priorities, including investing in our pharmaceutical business.”
Glaxo then unleashed its spending firepower on securing Massachusetts oncology firm Tesaro, whose major marketed product, Zejula, is approved for use in ovarian cancer in the US and Europe.
It is also being studied in other cancers including lung, breast and prostate both on its own and in combination with other therapies.
Walmsley said: “The acquisition of Tesaro will strengthen our pharmaceuticals business by accelerating the build of our oncology pipeline and commercial footprint, along with providing access to new scientific capabilities.” But Glaxo shares fell 123½p to 1498p as investors were unnerved by the 110 per cent premium it is paying compared with Tesaro’s 30-day average price.
Liberum analyst Graham Doyle said: “Given the competition Tesaro faces and the relative lack of synergies with Glaxo’s existing oncology pipeline we are not convinced that this is the best way to do so.”