Following improvements in its supply chain and its successful launch of new products, GlaxoSmithKline (GSK) is optimistic about its Consumer Healthcare segment’s performance going forward.
Apart from its new products, the company has improved its supply management in order to avoid the issues it faced in European markets in 2014.
The Consumer Healthcare segment reported a rise revenue of 5% at constant exchange rates to 2.0 billion British pounds in 3Q16, following the strong performances of Sensodyne, Voltaren, Otrivin, and Theraflu as a part of its joint venture with Novartis (NVS).
Consumer Healthcare performance
GSK’s Consumer Healthcare segment achieved growth of 2% in US markets in 3Q16, followed by the strong performances of Flonase and new products under its Sensodyne brand. Flonase is a nasal spray for allergies. It competes with Sanofi’s (SNY) Nasacort. Sensodyne is a leading brand of oral healthcare products.
In European markets, the segment’s revenue rose 5% to 578 million pounds in 3Q16, driven by strong performances by Voltaren and Sensodyne. Voltaren is a nonsteroidal anti-inflammatory drug used in the treatment of pain or inflammation caused by arthritis or spondylitis. Voltaren’s competitors include Depomed’s (DEPO) Zipsor, Iroko Pharmaceuticals’ Zorvolex, and Hospira’s Dyloject.
The segment’s international revenue rose to 865 million pounds in 3Q16, driven by rises in the sales of its oral health products, including Sensodyne True White, and its wellness products such as Voltaren.
To diversify risk, investors can consider ETFs such as the VanEck Vectors Pharmaceutical ETF (PPH), which holds 5.2% of its total assets in GlaxoSmithKline. The PowerShares International Dividend Achievers ETF (PID) holds 2.3% of its total assets in GlaxoSmithKline.