GlaxoSmithKline split to form new HIV-focused FTSE 100 company

Pharmaceutical giant GlaxoSmithKline (GSK) has plans to create a new HIV-focussed subsidiary worth £15bn.

The idea is to float a small portion of ViiV Healthcare, which made £880m in pre-tax profits last year. GSK owns almost 80% of the shares in this organisation, the rest is owned by US competitor Pfizer and Japanese rival Shionogi.

Sir Andrew Witty, CEO of GSK, has claimed that ViiV Healthcare is underrated on the stock market but could earn more than Marks & Spencer or Sainsbury's if given the chance.

He said: "This is not a forecast, but this business will make a £1bn profit this year if you simply grossed up the nine months’ year-to-date on a straight line basis. That, I think, tells you straight away what the kind of underpinning profit number of this business might be.

“Obviously, this business is on an accelerating curve, it is an important business going through a very expansionary phase … and obviously we are keen that our shareholders get to be the full beneficiaries of that.”

ViiV Healthcare boasts 674 members of staff in 15 countries, and Witty remarked that it should be ranked somewhere between the top third and number 40 in the FTSE 100.

“I think number 40 puts it at [the level of retailer] Next, which is £10bn, [while] number 31 is [utility group] SSE at £15bn," he added.

However, he did not explain why he would sell GSK's shares in the medical firm if he so adamantly believed it would become more profitable. Critics have claimed he it eager to jump-start a boost in the GSK share price by moving the market, after accusations of bribery in China damaged GSK's outlook recently.

Witty also pledged that GSK would be the first pharmaceutical to unveil an Ebola vaccine this year, and has announced a cost-cutting regime that he expects to save an annual £1bn within three years.

Though job cuts are a concern, following the announcement of these plans GSK shares rose 2.6% to 1,377p.