Glaxo Has No Current Plans To Spin Off Viiv, But Does Not Rule It Out

By |
0 Comment
Whenever a corporate executive has to publicly state that they will not be spinning something off, it’s generally only a matter of time.  This is likely the case with GlaxoSmithKline(GSK) and its majority-owned Viiv Healthcare unit.  Viiv, of which Glaxo owns 76.5%, recently filed for approval for its anti-HIV drug, dolutegravir. If the drug is approved, it is likely to take significant market share from industry leader Atripla, manufactured by Gilead Sciences(GILD).

Bloomberg reports that Glaxo

has no plans “at the moment” to spin off its ViiV Healthcare Ltd. unit that is developing drugs to treat HIV, said Patrick Vallance, Glaxo’s president of pharmaceuticals research and development.

“ViiV exists as a standalone company of which we are majority shareholders,” he said in an interview in San Francisco, where he was attending JPMorgan Chase & Co.’s health- care investment conference. “It does all of the HIV work, there are no plans to change that.”

Asked if that meant the company has no plans for a spinoff, he said, “No, not at the moment. What that’s done is provided a huge focus around the HIV space, and it’s been an interesting lesson for GSK about how to get that sort of focus.”

Greater success for the company might well lead Glaxo and minority partners Shionogi & Co and Pfizer(PFE) to decide to spin it out on its own, and the company’s denials seem quite weak and couched. We’ll keep watching this in the coming months.

Disclosure: The author holds no position in any stock mentioned

 

Related articles