GSK-Pfizer joint venture to tap growing interest in vitamins and dietary supplements

By Stephen Daniells contact

- Last updated on GMT

© Getty Images / theevening
© Getty Images / theevening
Pharmaceutical heavyweights Pfizer and GlaxoSmithKline (GSK) recently announced that they will merge their consumer health units.

The units will see the two companies’ dietary supplement and over-the-counter brands, such as Pfizer’s Centrum and Caltrate with GSK’s Panadol and Sensodyne, come together in what analysts are calling “the world’s largest consumer health company”​.

GSK will have a majority controlling equity interest of 68%, while Pfizer will have an equity interest of 32%.

The companies said that the joint venture will be, “a category leader in Pain Relief, Respiratory, Vitamin and Mineral Supplements, Digestive Health, Skin Health and Therapeutic Oral Health.”

Over US$100 million in annual retail sales

Over 50% of Pfizer’s global consumer health sales come in the form of vitamins and dietary supplements, while 95% of GSK’s consumer health sales fall in OTC drugs, according to data from Euromonitor International.

Commenting independently on the announcement, Matthew Oster, Euromonitor’s head of consumer health, said: “This deal makes sense on a number of fronts. It brings together a number of global megabrands under one roof, from GSK’s Panadol and Voltaren to Pfizer’s Advil, Centrum and Nexium; together the company will house 25 consumer health brands with more than US$100 million in annual retail sales.

“It also marks a logical end to the rumors about Pfizer’s underperforming consumer health division, which had been reported to be on the block off-and-on for the last couple years.”

The combined consumer health divisions will make up 6% of the global consumer health market, he added.

“This will allow the new merged company take advantage of changing consumer trends around healthy living that are driving interest in vitamins and dietary supplements and will give them a competitive boost in diversifying away from a pure OTC portfolio.”

Oster added: “GSK has [been] able to show steady growth in a consumer health marketplace where many of the leading players, like Pfizer, have seen recent difficulties. It also makes sense in terms of the new company’s geographic portfolio, with Pfizer’s well-built presence in the US complementing GSK’s leading position in Western and Eastern Europe and the Middle East and Africa."

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