GlaxoSmithKline's (GSK) consumer healthcare division will be in focus this week as the pharmaceuticals giant unveils its third quarter earnings following "lacklustre" performance elsewhere in the sector.
Nicholas Hyett, equity analyst at Hargreaves Lansdown added that both US pharma firms Pfizer and Merck were rumoured to be looking at selling their consumer businesses.
Chief executive Emma Walmsley should have a particular interest in GSK's consumer division as she was its head before taking the company's top job earlier this year. However, the firm was seen to be shifting away from consumer goods with the sale of its Horlicks brand in the UK in July.
"A solid performance this quarter would not only bode well for the strength of the current brands, but might also open speculation GSK will go looking to pick up unwanted assets from rivals," Hyett said.
Walmsley has also begun a programme of asset sales in an effort to streamline drug research, which the market will be looking for further updates on.
GSK is expected to be seeking continued growth from new respiratory products to offset declines from its asthma drugs Advair and Seretide, and it will also look for performance from HIV treatments Tivicay and Triumeq.
Chris Beauchamp at IG added:
The drug division has suffered, thanks to the decline of revenues from Advair; so cost-saving and margin-boosting efforts remain on the agenda.
At 13.6 times forward earnings versus a two-year average of 15.3, and a 5.2 per cent yield against a sector average of 2.5 per cent, GSK still has a lot going for it.
The company's shares have risen from September lows, but they are still stuck below the key 1,543p peak from August.
On Friday shares in the FTSE 100 firm closed down 0.85 per cent at 1,522.97p.