) recently announced that it has entered into an agreement with a
South African pharma company, Aspen Group, to divest two
thrombosis products, Fraxiparine and Arixtra, and the related
manufacturing site at the Notre-Dame de Bondeville. The deal is
valued at £0.7 billion in cash, of which £0.1 billion pertains to
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As per the terms of the agreement, Aspen will acquire worldwide
rights to Arixtra and Fraxiparine in all territories excluding
China, India and Pakistan. However, Glaxo will continue to
distribute and market the products under license from Aspen in
Indonesia. Glaxo is expected to transfer the majority of assets
related to Arixtra and Fraxiparine by the end of 2013 and the
manufacturing site in the first half of 2014.
The move was not unexpected. On the second quarter conference
call, Glaxo revealed that it has received an offer from Aspen
Group for Fraxiparine and Arixtra, and the related manufacturing
The net proceeds from the transaction, expected to be
approximately £0.6 billion, will not have an impact on Glaxo's
We believe the deal is in line with Glaxo's long-term strategy.
Glaxo has been streamlining its Consumer Healthcare business
segment for some time now. In Sep 2013, Glaxo entered into an
agreement with a Japanese consumer goods company, Suntory
Beverage & Food Ltd., to divest its nutritional drinks
brands, Lucozade and Ribena, for £1.35 billion in cash. The deal
is expected to close by the end of this year.
Earlier, Glaxo had divested its non-core Consumer Healthcare
over-the-counter products primarily in the U.S. and Europe. Total
annual sales of these products amounted to approximately £500
million. Glaxo divested these products with the intention of
channeling its focus on priority brands and markets.
We believe that Glaxo will work on streamlining its operations
Glaxo, a large cap pharma company, carries a Zacks Rank #3
(Hold). At present, large-cap pharma companies like
) look well-positioned. While Roche is a Zacks Ranked #1 (Strong
Buy) stock, Novo Nordisk and Bayer carry a Zacks Rank #2