About Novartis Vaccines and Diagnostics, Inc.

GlaxoSmithKline (GSK) gives anxiety, asthma, and other ailments the ax. One of the top five pharmaceutical firms in the world, GSK's bestsellers include respiratory, neurological, cardiovascular, and dermatology drugs, as well as vaccines and antivirals. Its top product is asthma medication Advair (aka Seretide), which combines two of its other asthma products, Flovent and Serevent. Other bestsellers include epilepsy treatment Lamictal, cholesterol medicine Lovaza, prostate enlargement drug Avodart, and antibiotic Augmentin, as well as Cervarix and Pediarix vaccines. GSK's consumer products include Tums, dental care products Aquafresh and Sensodyne, and smoking-cessation products NicoDerm and Nicorette.


GSK operates through two primary segments -- Pharmaceuticals and Vaccines (which accounts for more than 80% of revenue) and Consumer Healthcare (which accounts for the remainder).

Within the Pharmaceuticals and Vaccines segment, the pharmaceuticals business develops and makes medicines that treat a wide variety of acute and chronic diseases. Respiratory drugs is its largest sales category, primarily due to blockbuster Advair, which brings in more than £4 billion annually. Other respiratory products include Ventolin, Relvar, and Anoro Ellipta. GSK also has a strong presence in the HIV market (through majority-owned ViiV Healthcare), as well as the central nervous system, cardiovascular, urogenital, dermatology (through its Stiefel division), virology, infectious disease, and metabolism treatment markets.

Meanwhile, the vaccines business is a global leader, with more than 30 pediatric, adolescent, adult, and travel vaccines on the market. Its Infanrix childhood vaccine for diptheria and tetanus leads the pack, followed by products for the prevention of hepatitis, pneumonia, rotavirus, and influenza. More than 80% of the group's vaccines are distributed in the developing world.

Consumer Healthcare products fall into the oral health, wellness, nutrition, and skin health categories, with top sellers including Sensodyne, Panadol, and Horlicks. The segment also makes key brands Theraflu, Polident and Abreva. GSK sells these products in more than 100 countries around the world. In 2015, GSK combined its consumer health care operations with those of Novartis to create a global leader in that market.

Sales and Marketing

The company markets its products directly to hospitals, pharmacies, doctors, and other health care consumers; it also uses wholesale distributors in some markets and serves customers in more than 150 countries overall.

Geographic Reach

GSK has more than 80 manufacturing facilities in 36 countries. The group's major R&D centers are located in the UK, the US, Belgium, and China.

The US is the company's largest market, representing about a third of total earnings. Europe and emerging markets (including the Asia/Pacific and Latin America) each account for about a quarter of revenue, and Japan accounts for nearly 10%.

Financial Performance

Note: Growth rates may differ after conversion to US dollars.

After remaining relatively stable, GSK's revenue took a dip in 2014. That year, revenue fell 13% to £23 billion when compared to 2013 revenue. (The company has restated its 2013 revenue to reflect £903 million in divestments; this comparison is to the original 2013 figure of £26.5 billion.) The decline was attributed to lower sales in all categories -- pharmaceuticals, vaccines, and consumer healthcare. Pharmaceuticals sales fell an overall 5%, due largely to declines in the US, and despite growth in emerging markets and Japan as well as in the ViiV Healthcare unit. Vaccines sales dropped 1%, as did consumer healthcare.

Profit after taxation fell 50% to £2.8 billion in 2014, primarily as a result of the decreased revenue. Net cash flow from operating activities dropped 28% to £5.2 billion due to the negative impact of foreign exchange rates.


In 2014 GSK announced a major transaction with Novartis that reshaped its operations. It paid Novartis $7.1 billion for that company's vaccine business while collecting up to $16 billion for handing over its oncology line. The two companies are also combining their consumer products lines to create the world's top provider of over-the-counter (OTC) medicines. Altogether, the three-part deal is expected to add £1.3 billion to GSK's bottom line and strengthen its core OTC and vaccine businesses.

As sales in GSK's largest market, the US, account for about a third of pharmaceutical sales, maintaining a rich portfolio of US patent-protected products can make or break the company's future. For example, cardiovascular drug Lovaza began facing generic competition in 2014 and fell 54% that year. Other established products that have experienced sales slumps due to patent losses include best-selling herpes drug Valtrex and anti-depressant Paroxetine (marketed as Seroxat and Paxil).

The development of new potential blockbusters is the best way to alleviate these losses. GSK has some 25 pharmaceutical candidates in trials for conditions such as HIV, respiratory, immuno-inflammation, and cardiovascular disease, as well as some 15 vaccine candidates for the prevention of diseases including shingles, hepatitis C, tuberculosis, malaria, and Ebola.

GSK is also working to pump potential new blockbusters into its pipeline by acquiring promising research firms and forming development agreements with other drug companies. The company is working with pharmaceutical firms Pfizer and Shionogi on HIV medications through ViiV Healthcare; many of the company's HIV and vaccine development programs aim to provide affordable disease preventions and treatments to developing countries. ViiV Healthcare sale rose 15% in 2014, largely due to the successful launches of antiretroviral drugs Tivicay and Triumeq.

A major trend among pharmaceutical companies is to focus on growing in emerging markets, which represent an opportunity for big sales because of a relatively untapped consumer base. Towards that end, GSK has established a presence in select Asian, African, Latin American, and Middle Eastern nations.

CEO Andrew Witty is intent on keeping the company focused on small strategic acquisitions and expansion in fast-growing markets, including vaccines, biopharmaceuticals, and consumer health products. He is also carrying forth ongoing cost-cutting measures, which aim to reduce operational expenses through measures such as simplifying its administrative infrastructure, narrowing its R&D programs, and consolidating its drug development and manufacturing sites. To focus on its top selling drugs and R&D investments, the company is also divesting assets where it sees fit.

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Novartis Vaccines and Diagnostics, Inc.

350 Massachusetts Ave
Cambridge, MA 02139-4182
Phone: 1 (617) 871-7000
Fax: 1 (510) 655-9910


  • Employer Type: Public
  • Director, Secondary Operations: Dave Sehgal
  • Vice President Asia Pacific: Edward Stauber
  • Director, Strategic Alliances: Cathy Thut

Major Office Locations

  • Cambridge, MA

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