As part of a restructuring process expected to take two years, British pharmaceutical giant Glaxo SmithKline (GSK) will split off its consumer health business into a standalone company. The transaction will require shedding its 68% share of the joint venture established last year with Pfizer of the US.

At the same time, the UK drugmaker said it may consider adding its prescription dermatology unit to the separation plans. In preparation, it is launching a strategic review of the prescription dermatology business, which reported sales of £445 million in 2019.

Altogether, GSK expects the spinoff to cost £2.4 billion, including £1.6 billion in cash, with one-off costs for the separation estimated at £600-700 million. It is targeting £700 million in annual savings by 2022.

The company is already in the process of selling some non-core consumer products potentially worth £1 billion to help cover the cash costs.

How the spinoff would be transacted has not been revealed. Ideas floated by management as the GSK-Pfizer jv took shape ranged from an initial public offering to a demerger of the assets to shareholders followed by a listing on the UK equity market.

Belgian vaccines business to be restructured

In a separate project, Glaxo has begun restructuring its Belgian vaccine activities, with plans to eliminate up to 720 jobs. The cuts will mainly affect management positions in R&D, manufacturing and global support functions. GSK also plans to terminate 215 temporary contracts as they expire.

The British drugmaker is the Belgian pharma sector’s largest employer, with 9,000 on the payroll.

Unaffected by the employment drawdown, the company said it will invest €500 million in Belgian R&D, manufacturing and other technologies over the next three years to support development of new vaccines.  Further automation of production facilities will facilitate a capacity increase.

GSK Vaccines claims to be the world’s largest vaccine manufacturer.