Glaxosmithkline Plc (ADR) (NYSE:GSK)’s Roadmap For HIV Drugs Business

GlaxoSmithKline plc (ADR) (NYSE:GSK) is planning to float an initial public offering for the company’s HIV medicines business. The company set out a roadmap for potential IPO in 2016, underscored by its hiring of three leading banks to guide on the industry’s largest ever public share offering.

The company has hired Goldman Sachs Group Inc (NYSE:GS), Morgan Stanley (NYSE:MS) and Citigroup Inc (NYSE:C) as financial advisers on ViiV Healthcare, in which GSK holds a nearly 80 percent stake. The remaining stake is held by pharmaceutical giant Pfizer Inc. (NYSE:PFE) and Shionogi.

Andrew Witty, GSK CEO, expressed that the British drug maker will be mulling the pros and cons of an IPO over the next couple of months. The company also needs to decide on where to list the shares of ViiV and how much share to sell. Witty also revealed earlier this month that the action related to ViiV could serve as a model for future strategies.

In October 2014, GlaxoSmithKline plc (ADR) (NYSE:GSK) said that it was considering to float its rapidly growing HIV medicines business as part of efforts to reorganize its business.

Following the discussion with financial advisers, the GSK board would decide whether to go ahead with the float. The next related update is expected alongside the company’s Q2 2015 earnings release.

While talking at the annual earnings conference call, Witty told reporters that the management will require some time to talk to potential investors about the floatation and that would eventually lead into 2016.

GlaxoSmithKline plc (ADR) (NYSE:GSK)’s sales of Tivicay and Triumeq, key HIV drugs, were doing better than expected. Higher sales helped increase overall ViiV sales by 15% in 2014 to GBP 1.5 billion.

Analysts have anticipated a market valuation of approximately GBP 12-18 billion, or $18-27 billion for the HIV medicines business, however, the final price could depend on the commercial success of new HIV treatments.

Lisa Ray

Lisa Ray primarily covers Retail and Healthcare. Lisa Ray has completed her MBA (Finance) and an avid market tracker. She is a stock market analyst who closely tracks US markets along with other global markets like India. She has been expressing her views for years about markets and also advises various clients.

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