Haleon
Haleon plc is a British multinational consumer healthcare company headquartered in Weybridge, Surrey. It was created on 18 July 2022 by the demerger of the consumer healthcare business of GSK and is among the largest companies in its sector, selling over-the-counter medicines, oral health products, vitamins and supplements in around 100 markets.
| Haleon plc | |
|---|---|
| Type | Public |
| Traded as | LSE: HLN; NYSE: HLN; FTSE 100 component |
| Industry | Consumer healthcare |
| Founded | 18 July 2022, by demerger from GSK |
| Headquarters | Weybridge, Surrey, United Kingdom |
| Area served | Approximately 100 markets |
| Key people | Sir Dave Lewis (chairman), Brian McNamara (chief executive), Dawn Allen (chief financial officer) |
| Products | Over-the-counter medicines, oral health products, vitamins, minerals and supplements |
| Revenue | Approximately £11.2 billion (2024) |
| Employees | Approximately 22,000 |
| Website | haleon.com |
The name, pronounced HAY-lee-on, combines the words hale, meaning in good health, and leon, connoting strength, and was chosen for its neutrality across languages rather than for any connection to the company's history.
Haleon's portfolio is organised around five categories: oral health, led by Sensodyne, the leading sensitivity toothpaste in the world, together with Parodontax, Polident and Corsodyl; pain relief, led by Panadol, Advil in certain markets and Voltaren; vitamins, minerals and supplements, led by Centrum and Emergen-C; respiratory health, led by Otrivin and Theraflu; and digestive health and therapeutic oral care, including Eno and Tums.
History
Origins
The business Haleon inherited was assembled over more than a century by several companies. Its oldest elements include Beecham's pills, sold in Lancashire from 1842, and the proprietary medicines and household products of the Beecham Group; the products of Smith Kline and French and of Glaxo; Panadol, introduced by Frederick Stearns and Company in 1956 and developed as a paracetamol product without the gastric effects of aspirin; and Sensodyne, launched in 1961 in the United States by Block Drug and acquired by GlaxoSmithKline in 2001.
Two transactions created the business in its final form. In 2015 GSK and Novartis combined their consumer healthcare operations into a joint venture that GSK controlled with 63.5 per cent, bringing Voltaren, Otrivin, Theraflu and Excedrin into the same portfolio as Sensodyne, Panadol and Nicorette; GSK bought out the Novartis interest in 2018 for US$13 billion. In 2018 GSK agreed to combine that business with Pfizer's consumer healthcare operations, which brought Advil, Centrum, Caltrate, ChapStick and Robitussin, with GSK holding 68 per cent and Pfizer 32 per cent, and with the stated intention of separating the combined company within three years.
Demerger, 2022
The separation was completed on 18 July 2022. Haleon was listed on the London Stock Exchange with a secondary listing of American depositary shares in New York, in the largest European flotation for more than a decade, valued at approximately £30 billion on admission. GSK shareholders received shares in the new company, GSK retained a holding it has since sold entirely, and Pfizer retained its 32 per cent, which it disposed of progressively through placings and a buyback, exiting fully in 2024.
The rationale followed the pattern adopted across the pharmaceutical industry, in which Johnson and Johnson separated Kenvue, Sanofi separated Opella and Merck and Co. had earlier separated Organon. Consumer healthcare and prescription pharmaceuticals require different capital, different skills and different risk tolerance: a consumer business depends on brand marketing, distribution and incremental product improvement and produces steady cash flows, while a pharmaceutical business depends on research whose outcomes are binary. Holding both obscures the performance of each and, investors argued, results in the consumer business being valued at a pharmaceutical company's multiple rather than a consumer company's.
Before the demerger GSK rejected three unsolicited approaches from Unilever, the highest valuing the business at £50 billion, on the ground that they fundamentally undervalued it. The rejection was subsequently supported by Unilever's own shareholders, who reacted to the proposal with sufficient hostility that it was abandoned.
Since the demerger
Haleon's early years as an independent company were shaped by the debt it carried from the separation, approximately £10 billion, which it has reduced steadily, and by litigation inherited from its predecessors.
The most significant of the latter concerns ranitidine, sold as Zantac, which GSK had originated and which Pfizer and others had sold over the counter. Claims alleging that the drug degraded into a probable carcinogen were brought against every company in its history, and Haleon's exposure derived from the period in which the consumer business held rights. Haleon settled the great majority of American state court claims in 2024 for approximately US$2.2 billion in aggregate across the defendants, of which its share was the smaller part, and the resolution removed the principal uncertainty attached to its shares.
The company has pursued growth through what it describes as power brands, concentrating investment on a small number of large names in each category and disposing of smaller ones. It sold ChapStick to Suave Brands in 2024 and its Nicotinell and Nicabate nicotine replacement brands outside the United States to Dr. Reddy's Laboratories in 2024 for £500 million, retaining Nicorette in the United States, and has made small acquisitions in growth markets.
Its performance since listing has been steady rather than spectacular: organic revenue growth in the mid single digits, driven substantially by price rather than volume during the inflationary period, with volumes weak in North America and stronger in emerging markets. Its shares traded below the flotation price for an extended period before recovering, and it entered the FTSE 100 on admission.
Business
Categories and brands
Oral health is the largest category and the one in which Haleon's position is strongest. Sensodyne is the leading brand for dentine hypersensitivity worldwide and is unusual among consumer products in being recommended by professionals, which the company supports through a very large programme of engagement with dentists and hygienists. Parodontax treats gum disease, Polident and Poligrip serve denture care, and Corsodyl is a chlorhexidine mouthwash.
Pain relief comprises Panadol, the paracetamol brand sold in a large number of markets under that name and as Calpol for children in Britain and Ireland; Advil, the ibuprofen brand in the United States and Canada; Voltaren, a topical diclofenac gel whose switch from prescription to over-the-counter status in the United States in 2020 was among the more significant such conversions of recent years; and Fenbid in China.
Vitamins, minerals and supplements comprises Centrum, the leading multivitamin brand in the United States, Caltrate and Emergen-C. The category has grown considerably since the pandemic, when interest in immune support rose, and its subsequent moderation has been one of the company's difficulties in North America.
Respiratory health comprises Otrivin nasal sprays, Theraflu and Contac. Digestive health and other comprises Eno, Tums, Nexium 24HR and ChapStick before its disposal, together with smaller brands.
Geography
Approximately a third of revenue comes from North America, a third from Europe, the Middle East, Africa and Latin America, and the remainder from Asia-Pacific. Emerging markets, particularly China, India, Brazil and Indonesia, are the principal source of volume growth, since the consumption of over-the-counter healthcare rises with income from a low base and since self-medication is often the only accessible form of care where health systems are thin.
Manufacturing is conducted at around twenty sites, including Maidenhead and Dungarvan in Ireland, Levice in Slovakia, Suzhou in China, Nashik in India and Lincoln in Nebraska, and a substantial part of production is outsourced.
Regulation
Consumer healthcare is regulated as medicine where products make therapeutic claims and as food or cosmetics where they do not, and the boundary is policed differently in each country. Over-the-counter medicines require marketing authorisation, and the conversion of a product from prescription to non-prescription status, known as a switch, is a substantial commercial event requiring clinical evidence that the public can use the medicine safely without supervision. Haleon's growth strategy depends materially on securing such switches, of which the Voltaren conversion in the United States is the outstanding recent example.
Advertising is separately regulated, and the company has been the subject of rulings in several jurisdictions over health claims, particularly in the supplements category, where the evidence supporting claimed benefits is often weak and where regulators including the European Food Safety Authority have refused the great majority of claims submitted to them. Paracetamol, the active ingredient in Panadol, is among the most common agents in overdose and in drug-induced liver injury, and pack size restrictions apply in a number of countries as a result.
Corporate affairs
Brian McNamara has been chief executive since the demerger, having led GSK's consumer healthcare business from 2016 after a career at Novartis and Procter and Gamble. Sir Dave Lewis, formerly chief executive of Tesco and before that a long-serving Unilever executive, is chairman.
The company employs approximately 22,000 people. Its headquarters moved from Brentford, where the business sat within GSK, to a purpose-built site at Weybridge in 2023.
Its stated purpose, to deliver better everyday health with humanity, and its emphasis on health inclusivity, meaning the removal of barriers that prevent people obtaining everyday healthcare, are unusual in the specificity with which they are reported, and the company publishes an index measuring access.
Competition
Haleon competes with Kenvue, separated from Johnson and Johnson in 2023 and holding Tylenol, Listerine, Band-Aid, Neutrogena and Nicorette outside the United States; with Procter and Gamble, whose Vicks, Pepto-Bismol, Oral-B and Crest brands overlap directly; with Bayer Consumer Health, holding Aspirin, Bepanthen, Berocca and Claritin; with Reckitt, holding Nurofen, Strepsils, Gaviscon and Durex; with Sanofi's Opella, holding Doliprane, Allegra and Buscopan; with Nestlé Health Science in supplements; and with private label products, which hold very large shares in several categories and which constitute the principal constraint on pricing.
The sector's characteristics are favourable in the aggregate: demand is stable and largely unaffected by economic conditions, products are inexpensive and purchased habitually, brands are durable because people are reluctant to experiment with what they take when unwell, and the regulatory requirements deter entry. Its difficulty is that growth is slow, arising from population, from income in emerging markets and from switches, and that the retailers through which the products reach consumers have consolidated and bargain accordingly.