While GlaxoSmithKline plc (LSE:GSK; NYSE:GSK) and Pfizer Inc. (NYSE:PFE) made the decision this week to focus more exclusively on innovative medicines by combining their consumer healthcare businesses in a joint venture, Johnson & Johnson(NYSE:JNJ) told BioCentury that it continues to see value in keeping its leading consumer healthcare business in house.
On Wednesday, GSK and Pfizer agreed to combine their consumer healthcare businesses into a JV that would have combined 2017 global sales of $12.7 billion. GSK, which will own 68% of the JV, plans to spin out the consumer healthcare business within the next three years (see “GSK, Pfizer JV Allows Both Pharmas to Focus on Innovation”).
The combo would still trail J&J’s consumer business, which had 2017 global sales of $13.6 billion.
In a statement emailed to BioCentury, a J&J spokesperson said the consumer healthcare business provides an advantage in that “many people come to know us first through our consumer brands.” They said that while J&J regularly reviews the pharma’s diversified structure, the belief is that “being broadly based across healthcare is a competitive advantage and a source of strength for J&J.”
Among the three pharmas, J&J also has the largest price-to-earnings (P/E) ratio, coming in at 14.9, vs. 13.7 for Pfizer and 13.2 for GSK.
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