Drugs giant GlaxoSmithKline (GSK) has taken a step towards what would be the industry’s largest-ever initial public offering (IPO) with the appointment of banks to assess the future of its HIV medicines subsidiary.
Sky News has learnt that GSK has hired Citi, Goldman Sachs and Morgan Stanley as financial advisers on ViiV Healthcare, one of the company’s fastest-growing units.
The appointment of the three banks will fuel the prospect of a blockbuster flotation of the division, which analysts believe could be worth at least £17bn.
GSK, which reports its full-year results later on Wednesday, is yet to make a firm decision about its plans for ViiV, although insiders cautioned that a public share sale would be unlikely for about a year.
Citi, Goldman Sachs and Morgan Stanley are likely to be in a strong position to handle any future IPO.
If it does come to the market – probably in London – it would be among the most prominent healthcare listings for many years, and would almost certainly be the largest in the sector to date.
ViiV’s sales have surged in recent years as HIV treatments have become increasingly widespread, with GSK expected by the City to have reaped £1bn in profit last year from the division.
Although a vaccine or cure for HIV and AIDS remain elusive to medical science, the development of Tivicay, ViiV’s daily treatment for the disease, has been a significant step forward in terms of reduced side-effects and increased efficacy.
GSK owns 78% of ViiV, with the remainder held by Pfizer, the US pharmaceuticals group which last year tried to buy British rival AstraZeneca, and Shionogi & Co, a Japanese group.
The performance of ViiV has been a bright spot for GSK during an otherwise troubled period.
The company, which some analysts believe could be a takeover target for Pfizer or another large rival, was caught up in a bribery scandal in China which cost it hundreds of millions of pounds to resolve last year.
Sir Philip Hampton, the chairman of state-backed Royal Bank of Scotland (RBS), has just joined GSK’s board and will take over as its chairman later this year.
Some investors have expressed disquiet at the company’s performance and have called for Sir Christopher Gent, the current chairman, to step down sooner.
GSK declined to comment on the appointment of banks to advise on the future of ViiV.