GSK Boss Says Pharma Giant May Be Split Up

Drugs giant GlaxoSmithKline (GSK) has revealed a possible spin-off of its consumer healthcare division.

Chief executive Sir Andrew Witty said the carve up may occur if it offered more value as a standalone company.

It comes following an announcement in April that GSK sealed a £4.2bn joint venture deal with Swiss company Novartis (Xetra: 904278 - news) , combining their consumer healthcare arms.

Sir Andrew told the Financial Times that the transaction strengthened the businesses and that the new structure would create more options in the long run.

However, despite the recent deal, he admitted he was "willing to accept" that the future may be more financially viable with standalone companies.

GSK is currently enduring a bribery scandal in China.

Investigators claim the country's former head, Mark Reilly, knew of sales staff bribing doctors and hospitals to use its products.

The scandal deepened after a sex tape involving Mr Reilly emerged during an ongoing probe.

Two weeks ago, authorities in China issued formal charges against a British investigator for the company and his Chinese-American wife.

Peter Humphrey and his wife Yu Yingzeng were charged with illegally obtaining and selling private information, according to China’s state news agency Xinhua.

The company has also been implicated in alleged malpractice in Iraq and Poland.

Last week GSK also issued a profits warning, in part due to poor sales of its asthma medicine.

It reported that operating profits fell 10% to £2.2bn in the first half of its financial year, with sales deteriorating by a worse-than-expected 13% in the second quarter alone.

The company blamed weak demand for its lung drugs in the US and the effects of a strong pound on currency exchanges.

The company has now been forced to cut its performance forecast for the full year.