The only party not getting heartburn over GSK demerger is the lawyers
Lawyers at pharmaceutical companies are more important than the scientists, runs an old and cynical piece of industry wisdom. The demerger of £24bn consumer healthcare group Haleon from its former parent, GlaxoSmithKline, is proving its truth in spades.
Exhibit A is Haleon’s bill for separating, which has just leaped from £400m to £500m, largely because contracts were written in US dollars rather than (depreciating) sterling. The lawyers aren’t scooping the lot, it should be said, since Haleon also had to get its IT systems on to a separate platform, find itself an office and change a lot of medical labels. But they will have collected the lion’s share of the £100m-ish that relates to admission to London’s stock market.
Exhibit B, though, is where the legal bonanza threatens to run and run. It is the dispute within a dispute over Zantac, the heartburn drug that was vital to the rise of old Glaxo back in the 1980s and and 90s. To recap: GSK, along with various other pharma companies that sold and marketed Zantac, or bought and sold rights, are being sued in a Florida court by claimants who argue their cancers are linked to the product. GSK argues there is no evidence to suggest an increased risk of cancer but maintains that, were courts to establish a liability, it would have some scope to claim against Haleon.
Thus the most significant item in Haleon’s debut half-year numbers was the legal section titled “update on Zantac”, rather than the steady performance of brands such as Panadol and Sensodyne. In short, Haleon said it has rejected the indemnification request from GSK and US group Pfizer, which was the partner in the original joint venture in 2018 that created the now-demerged group. “At that time, neither GSK nor
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