Pharmaceutical giant GlaxoSmithKline is considering selling iconic drink brands Lucozade and Ribena “to ensure their continued growth” following a drop in operating profits at the company in 2012.
The drugs firm said it was placing the brands under review and would consider all strategic options which may see the products repositioned, partnered with another company, or sold off.
Glaxo said: “These brands are iconic and the review will look at the best ways to ensure their continued growth.”
The announcement came as Glaxo said its profits had dropped 5% to £7.4 billion for 2012. Turnover was down 3% at £26.4bn as austerity drives across Europe affected medicine prices and the development of drugs. This has prompted the company to announce a further restructuring of its European pharma ceuticals operations while it looks for cost savings of £1bn by 2016. It has not said how this will affect jobs.
According to the Globe and Mail it took just 18 minutes for the company to get the first call from an investment banker offering to help it dispose of its famous drinks, which together could fetch $1.2bn (£770m) or more.
Lucozade and Ribena, which were owned by Beecham prior to its merger with SmithKline, form part of Glaxo’s consumer healthcare division, which also includes Horlicks and Panadol. It posted a 5% rise in full-year sales to £5.1bn.
In research and development (R&D), the company – which is led by chief executive Sir Andrew Philip Witty – said it had made significant progress, with six products now under regulatory review.
Helal Miah, an analyst at the Share Centre, said Glaxo’s results were in line with expectations. He said: “Investors will be pleased to see new drugs coming to the market and the company’s confidence of improving R&D returns to 14 per cent.”
