Proverbs 26 vs 5
10 Apr 2018
Glaxo shingles vaccine capturing bulk of U.S. market Glaxo shingles vaccine capturing bulk of U.S. market - ReutersApr. 10, 2018 12:14 PM ET|By: Douglas W. House, SA News Editor Reuters reports that GlaxoSmithKline's (GSK +1.6%) shingles vaccine Shingrix (recombinant, adjuvanted Herpes zoster vaccine) has captured over 90% of the U.S. since its launch only five months ago.The rapid ramp is at the expense of Merck's (MRK +1%) Zostavax which generated $668M in global sales last year.Analysts project Shingrix will generate $1.8B in sales in 2024.Previously: Glaxo's Shingrix OK'd in Europe and Japan; shares up 4% premarket (March 23)Previously: FDA Ad Com backs Glaxo's shingles vaccine Shingrix (Sept. 13, 2017)
FRTEB
10 Apr 2018
Re: Woody dumps AZN I wouldn't disagree about the UK market in general, but if I were paying someone to manage my money I'd expect them to make fewer howlers than Woody has of late. To then hide the need for cash to service fund redemptions and rights issues by dressing it up as investment management is, like I said, disingenuous IMHO. As for the B word - please, NO! Not here as well! I've heard enough about that on several other boards 
sound money
10 Apr 2018
Re: Woody dumps AZN FRTB,You may be right about the window dressing. However I do think he is right to buy the UK market. Undervalued in my opinion. To his credit Woody does not appear to have a jaundiced view of Brexit.M
FRTEB
10 Apr 2018
Re: Woody dumps AZN What Woody conveniently fails to mention is the millions (or is it now billions?) withdrawn from his funds and the cash needed to fund the Provident Financial rights issue (+ Capita rights issue?) All that money has to come from somewhere but he dresses it up as managing investment decisions. A tad disingenuous if you ask me.
gamesinvestor
09 Apr 2018
Woody dumps AZN He's dumped most of the holding in the Equity Income Fund :-In it's place he's done this (mix up these words -- hot pan the frying out the fire into of) :-""""These judgements are always fluid but the opportunity in domestically-exposed companies has become increasingly attractive and the portfolios are evolving to take advantage. This has meant adding further to Lloyds and several housebuilders such as Barratt Developments, Crest Nicholson, Taylor Wimpey and a new position in Bovis. Meanwhile, we have also added to Provident Financial, Babcock International and NewRiver REIT amongst several others.""""Games - LMFAO !!
Hydrogen Economy
09 Apr 2018
Re: GSK deal - broker soundbites Novartis had a deal lined up to spend 8.7bn on a US gene therapy business.[link]
II Editor
05 Apr 2018
NEW ARTICLE: Why GSK is worth more despite R&D worries "Now that LSE:GSK:GlaxoSmithKline has finally ended investor worries about a dividend-busting M&A deal in consumer healthcare, attention has turned back to what’s wrong with the pharma giant's R&D pipeline.CEO Emma Walmsley continues to have this ..."[link]
Hydrogen Economy
04 Apr 2018
Re: GSK deal - broker soundbites Games"If the business was so lucrative, why would Novartis be so keen to offload it at the earliest opportunity?"Good question and I don’t know but have the following observations.Novartis put 60% ish of their CH/OTC business into the JV (presumably the rest was not wanted by GSK), they classed the remaining OTC business as discontinued operations. Novartis 2017 annual report section on Strategy did not mention Consumer Healthcare. The deal included Novartis has certain minority rights and exit rights, including a put option that is exercisable as of March 2, 2018 until latest 2035. It looks rather like the JV was always intended as a phased disposal for Novartis. GSK was probably not in a position to buy it out-right at the time (and arguably only just able to do so now). Maybe Novartis want to make a purchase which better fits their strategy.GSK control the JV although Novartis had positions on the board, Novartis had been complaining that GSK were not pursuing synergy benefits quickly enough. Maybe GSK realized that maximising benefits would fatten up the goose and drive up the sales price, so slow-timing the changes and tolerating a bit of fat for a year or two would reduce the buy-out cost at multiples of the potential savings, too Machiavellian?Despite the Novartis complaints, CH business had the highest profit growth rate of GSK’s 3 divisions at 23% /11% CER, vs Vaccines 15/11 and Pharma (inc R&D) at 8/1, some one-offs helped out but revenue and margin growth were positive. If GSK under EM can now wring out the synergies and get the margin growth they forecast this seems like a good deal for GSK holders. H2
gamesinvestor
03 Apr 2018
Re: GSK deal - broker soundbites If the business was so lucrative, why would Novartis be so keen to offload it at the earliest opportunity?There may be an obvious answer to this, I haven't read anything about it, just wondering !!Games
Lupo di mare
02 Apr 2018
Re: GSK deal - broker soundbites Right with you, frusset, as I alluded to last Tuesday at 10.17.
nk1999
30 Mar 2018
HL view "The acquisition of the outstanding consumer healthcare stake comes six months after GSK's new CEO announce sweeping disposals and plans for £1bn of cost savings.These measures are underway, and initial signs are good. The savings are being channelled back into R&D across the new target therapy areas - Respiratory, HIV/infectious diseases, Oncology and Immuno-inflammation. Given that GSK's recent batch of "new" products now account for 22% of revenues and are growing rapidly you can see the attraction.The steady decline in revenues from Advair has been painful. However, with rivals struggling to get a generic version past the US regulator, the respiratory blockbuster is holding up better than expected. Nonetheless, the looming increase in competition remains a time bomb ticking under the group and at some point will inevitably blow a hole in the GSK income statement.However, the varied portfolio has been delivering broad-based growth in recent quarters. In particular the increasing contributions from the Consumer Healthcare and Vaccines divisions (now over 40% of group sales combined), should reduce reliance on blockbuster drugs and strained Western healthcare budgets.It's a sensible strategy and the recurring revenues should help support the dividend.On that note, the commitment to hold the payout flat next year will have caught the eyes of some investors - following speculation that it could be sacrificed in favour of a big Consumer Healthcare acquisition from Pfizer or Merck. The deal to buy out joint venture partner Novartis will put those rumours to bed for now. At present GSK offers a prospective yield of 6.2%.Going forwards the focus is firmly on improving free cash flow. Given the recent problems GSK has had in that area, this is very welcome. Free cash was less than 40% of core operating profits last year and didn't even come close to covering the dividend expense.GSK has some way to go before it's fully out of the woods, but early signs suggest the new CEO is willing to make the tough decisions when required."
frusset
29 Mar 2018
Re: GSK deal - broker soundbites This might look crazy, but maybe the deal strengthens GSK's balance sheet, if the deal is largely funded by debt. To keep it simple, forget about selling Horlicks and suppose GSK takes on £9.2B of debt to pay Novartis £9.2B, and it's due to be repaid in 5 years. Is having to pay £9.2B in 5 years, plus interest until then, worse than having to pay Novartis the estimated market value of their Consumer Health stake, bearing in mind that Novartis could exercise their put within windows from 2018 to 2035?This is how the liability for Novartis's put option has grown:Year end ~ Liability for Novartis's put option, in millions2015 ~ £6,2042016 ~ £7,4202018 ~ £8,606Post-deal analyst call ~ £8.9 billionI suppose you calculate debt-related financial metrics by looking at things called debt, but that shouldn't blind anyone into thinking that if a liability isn't called debt, it can't possibly be worse than debt.My choice of 5 years to repay the debt is arbitrary. GSK seems more likely to be able to repay £9.2B in 5 years than able to pay Novartis £8.9B as of the date of the deal. I expect that if GSK were allowed to take years to cough up to Novartis, they'd have been keen to communicate it and I'd have seen it. There's also the interest on the debt, and the cash flow from the minority interest, to consider.Sources:"The Consumer Healthcare Joint Venture put option of £6,204 million reflects the recognition of the initial value of the liability on the Group balance sheet."PDF page 1269 of the 20-F (filed in the US)"At 31 December 2017, the estimated present value of the potential redemption amount of the Consumer Healthcare Joint Venture put option recognised in Other payables in Current liabilities was £8,606 million (31 December 2016: £7,420 million reported within Other non-current liabilities)."PDF page 56 of the 2017 results announcement"The agreed price of £9.2 billion is around 3% different to the undiscounted valuation we included in the year-end accounts of £8.9 billion, well within normal trading ranges.".PDF page 3 of the analyst call transcript "ACCELERATING OUR STRATEGY: GSK TO ACQUIRE FULL OWNERSHIP OF CONSUMER HEALTHCARE BUSINESS""Novartis has the right to require GSK to acquire its 36.5% shareholding in the Consumer Healthcare Joint Venture at a market-based valuation. This right is exercisable in certain windows from 2018 to 2035 and may be exercised either in respect of Novartis’ entire shareholding or in up to four instalments."PDF page 1426 of the 2015 20-F (filed in the US)
frusset
29 Mar 2018
Re: GSK deal - broker soundbites "The value is close to what was anticipated - GSK already had £8.8bn booked as short term liability on its balance sheet ($12.5bn at current rates)."Just a minor point. I think "current rates" isn't relevant, except that the rates haven't had time to move much. That's because the acquisition price, though specified in US dollars, has been fully hedged to effectively be a fixed amount in sterling. I got that from the conference call. There's a PDF transcript of it on GSK's site.
IOMINVESTCOM
28 Mar 2018
Re: GSK deal - broker soundbites GlaxoSmithKline: Berenberg reiterates buy with a target price of 1,780p
marktime1231
28 Mar 2018
Re: Topped up Brokers presumably give their view for reasons ... HSBC at £20 is selling something in silver wraps at the back of the nightclub, SocGen at £11 is not, KC saying £14 just as the sp arrives there is er ... but the consensus seems to be that GSK has steered a course through its options and now has more good arguments in its favour than against it. Well done Emma.The future is no more or less certain. It all boils down to who you want to believe most.That said I am not going to hide the relief, oh to be back to £14 having dipped in at £13. Not yet content, even with the dividend held it feels cheap, under £15.
