GlaxoSmithKline sells off stake in Quest Diagnostics

GlaxoSmithKline has announced the sale of its entire stake in Quest Diagnostics, a move expected to generate gross proceeds of $1.7 billion (1.05 billion pounds).

The offering and repurchase transaction sees Quest reclaim 30,755,151 shares of common stock from the pharmaceutical company, with GlaxoSmithKline set to receive $1.1 billion from the deal once tax deductions have been made.

GlaxoSmithKline took control of this share of Quest in 1999 as partial consideration for the sale of its clinical laboratories unit and has been gradually reducing its stake since then.

Julian Heslop, chief financial officer of GlaxoSmithKline, said the firm has been pleased with the investment in Quest, but has been considering this sale "for some time".

"We have decided that now is a good time to take advantage of favourable market conditions, thereby releasing funds from one of our non-core assets," he added.

Last week, the company commenced a pair of phase III clinical studies for two investigational melanoma treatments, GSK2118436 and GSK1120212.