GlaxoSmithKline plc (LON:GSK) has confirmed reports that it plans to sell its Horlicks malt drink brand in the UK that will result in more than 300 job cuts.
The pharmaceuticals giant will offload the business in the UK and close the site in Slough, England where the malted drink is made as part of plans to focus on its core drugs division.
GSK will also sell its MaxiNutrition brand in the UK and outsource some manufacturing activities currently undertaken at its site in Worthing, England.
The company said its plans are likely to result in 320 job losses over the next four years.
New GSK CEO Emma Walmsley begins overhaul
Selling Horlicks and MaxiNutrition in the UK marks Emma Walmsley’s first major decision as chief executive since taking over the reins from Sir Andrew Witty in April.
At her first set of results as boss earlier this year, Wamsley said she wanted to prioritise the company’s drugs business.
The pharmaceuticals division accounted for £16.1bn of the total £27.8bn in annual sales last year.
In comparison, Horlicks, which is under GSK’s consumer healthcare division, generated £7.2bn in sales.
Combined annual UK sales of Horlicks and Maxi Nutrition are about £30mln.
As part of its strategy to build up the drugs business, GSK said it will invest about £140mln in UK sites focused on respiratory and HIV medicines.
However, it has ditched plans for a biopharmaceutical facility in Ulverston, England as it no longer needs the additional capacity. Local MP John Woodcock said it was "terrible news" that GSK had abandoned its plans to build the facility and has called an emergercy meeting for tomorrow.
Terrible news that GSK pulling out of biopharm investment in Ulverston. Speaking to their head of global manufacturing shortly.
— John Woodcock (@JWoodcockMP) 19 July 2017
Shocking for UK manufacturing. David Cameron launched this on Budget day 2012, was to be the first new GSK plant on UK soil for 30 years https://t.co/pkKuAoC0lo
— John Woodcock (@JWoodcockMP) 19 July 2017
GSK, which currently employs about 17,000 pepole in the UK, insisted that the announcements today had not resulted from the UK's vote to leave the European Union.
GSK tackles growing competition from generic drug makers
GSK’s decision to turn its attention to its pharmaceuticals comes amid growing pressure from generic versions of its drugs, including Advair asthma drug and HIV drug Triumeq.
Worries over generic competition saw star fund manager Neil Woodford sell his entire stake in GSK in May after holding shares for more than 15 years.
The fund manager's main concern was that US biotech firm, Gilead, was currently conducting trials for a generic version of Triumeq. Woodford also cited the company’s refusal to consider a break-up and fears about the sustainability of its dividend in his decision to sell his stake in GSK.
Shares in GSK rose 0.74% to 1,618.31 in afternoon trading.