My finance view

GlaxoSmithKline Plc (GSK.L: Quote, Profile, Research) is seeking acquisitions to boost its consumer health business, which the group’s divisional head hopes can achieve at least 10 percent sales growth in the long term.

John Clarke, president of Consumer Healthcare at Europe’s biggest drugmaker, said acquisitions were integral to his growth strategy, alongside product innovation and switching more drugs to over-the-counter (OTC) use.

“You could expect this industry to continue to consolidate. We’ll see more acquisitions come up, I’ve no doubt,” he said in an interview on Friday.

“If you can acquire a brand and put a strong pipeline behind it and globalize it, that is a very good way of getting economic leverage.”

With a range of products from cold remedies to toothpaste to nutritional drinks, Consumer Healthcare has sometimes been touted as a spin-off candidate for Glaxo.

But incoming Chief Executive Andrew Witty, who takes over in May, ruled out a sale of the unit last month and the company is increasingly looking to the division’s steady cash flow to offset a slowdown in its main prescription drug business.

The wider Glaxo group has been hit hard in the past year by generic competition to medicines, product delays and a safety scare over its second biggest drug, Avandia for diabetes.

By contrast, Consumer Healthcare is a bright spot, with sales growing 11 percent last year to 3.48 billion pounds ($6.95 billion), despite a weak dollar fast cash loans. Pharmaceuticals, which sold 19.2 billion, fell 4 percent. 

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