GSK buys Novartis out of joint venture in $13B deal
GlaxoSmithKline on Tuesday announced it has reached an agreement with Novartis for the buyout of Novartis’ 36.5% stake in their Consumer Healthcare Joint Venture for $13 billion.
“The proposed transaction addresses one of our key capital allocation priorities and will allow GSK shareholders to capture the full value of one of the world’s leading Consumer Healthcare businesses,” Emma Walmsley, GSK CEO, said. “For the Group, the transaction is expected to benefit adjusted earnings and cash flows, helping us accelerate efforts to improve performance. Most importantly it also removes uncertainty and allows us to plan use of our capital for other priorities, especially pharmaceuticals R&D.”
GSK is initiating a strategic review of Horlicks and its other consumer healthcare nutrition products to support funding of the transaction, and to drive increased focus on OTC and Oral Health categories. Combined sales of these products were approximately $777.5 million in 2017.
The majority of Horlicks and other nutrition products sales are generated in India, with the Horlicks range widely recognized as a portfolio of premium nutrition products. In India, these products are sold by GlaxoSmithKline Consumer Healthcare, a public company listed on the National Stock Exchange and Bombay Stock Exchange. The strategic review will include an assessment of GSK’s 72.5% shareholding in the company.
The Consumer Healthcare Joint Venture was formed as part of the three-part transaction between GSK and Novartis which was approved by shareholders in 2014. Last year, GSK’s Consumer Healthcare business reported sales of $11 billion. Since 2015, the unit’s sales have grown 4% on a 3 year CAGR basis (2015-2017 at 2014 CER) with an overall improvement in operating margins from 11.3% in 2015 to 17.7% in 2017.
Under the terms of the original transaction, Novartis had the right require GSK to purchase its stake in the Joint Venture.
With category-leading power brands, increased focus on science-based innovation and improved operational efficiencies, GSK Consumer Healthcare is well positioned to deliver sales growth, operating margin improvements and attractive returns, the company stated. The business expects operating margins to approach ‘mid-20’s’ percentages by 2022 at 2017 CER.
The transaction is subject to approval by GSK shareholders as Novartis is treated as a related party under U.K. Listing Rules, and the GSK board intends to unanimously recommend that shareholders vote in favor of the transaction.
Smartwatch used to detect irregular heartbeat, JAMA reports
A smartwatch coupled with a machine learning algorithm was able to detect irregular heartbeat, or atrial fibrillation, with high accuracy in a small group of patients undergoing treatment to restore normal heart rhythm, according to research published last week in JAMA Cardiology.
As many as 9,750 participants with an Apple Watch smartwatch enrolled in the Health eHeart Study, including 347 with self-reported AF, and another group of 51 patients undergoing cardioversion, a treatment using medication or electricity, to restore regular heart rhythm from 2016 to March 2017; participants wore smartwatches to collect heart rate and step count data as part of the development and training of a deep neural network, which is a type of machine learning algorithm, to detect AF.
“These data support further research regarding the use of commercially available smartwatches coupled with a deep neural network for the purpose of detecting AF,” noted Gregory Marcus, a researcher with the University of California, San Francisco.
“As sensor technologies have miniaturized in size and cost, their penetration into the consumer wellness and retail space has intensified,” wrote Mintu Turakhia, associate professor of Medicine (Cardiovascular Medicine) at the Palo Alto Veterans Affairs Health Care System, in an accompanying editorial. “Although most of these devices have not been integrated into routine clinical use for various reasons, they remain attractive targets for health care because of their potential to more easily access large populations for disease screening and management. Connectivity of these sensor devices to mobile phones, which are globally ubiquitous, simplify data collection at scale. At the same time, indefinite continuous ECG recording with wearables has been difficult because of issues of lead placement, electrode contact and battery drain. Heart rate sensors on watches and fitness bands use photoplethysmography — the digital version of pulse recordings first described more than a century ago. Therefore, an obvious question is whether these can be leveraged to detect arrhythmias.”
AF detection was associated with a lower accuracy in a larger group of people with a self-reported history of AF.
Atrial fibrillation affects 34 million people worldwide and is a leading cause of stroke. AF often has no symptoms and it can go undetected until a stroke happens.
More American adults determined obese, JAMA report finds
Americans are still getting fatter with age. The population of adults identified as obese or severely obese continued to grow in the United States between 2007-2008 and 2015-2016, according to research published Friday in the Journal of the American Medical Association.
But there were no significant overall changes among youth, noted lead author Craig Hales, a researcher with the Centers for Disease Control and Prevention. Obesity among adults has been on the rise since the 1980s but plateaued among youth between 2005-2006 and 2013-2014.
According to the research, 39.6% of all adults were classified as obese and 7.7% were determined to be severely obese over the course of 2015 through 2016. That’s up from 33.7% and 5.7%, respectively, from a similar report over the course of 2007 through 2008.
The increase in obesity rates among youth was less pronounced, the research found. As many as 18.5% of the population between the ages of 2 and 19 were classified as obese during the 2015/2016 period, up only sightly from 16.8% in 2007/2008. Youths classified as severely obese went up from 4.9% to 5.6% over those periods.
The data includes weight measurements of 16,875 youth and 27,449 adults (over the age of 20) from the National Health and Nutrition Examination Survey (NHANES) from 2007-2008 to 2015-2016.