Wellnex Life is eyeing further growth and partnership opportunities after signing a “lucrative” supply agreement with global pharmaceutical giant GlaxoSmithKline (GSK).

The arrangement will see the ASX-listed health and wellness company license and supply its soft-gel liquid analgesic (pain relief) range to GSK for sale in Australia and New Zealand for a minimum of three years.

Wellnex Life CEO George Karafotias said the deal is good news for the company and represents roughly 12 months of negotiations and an “intensive” due diligence process led by GSK.

“They’re not going to enter a supply agreement with a little ASX company like Wellnex without having surety of who they’re dealing with, surety of our financial status, and surety that we’re going to produce a high-quality product not just now, but into the future,” he said.

But the agreement has other benefits beyond the direct financial implications, Mr Karafotias said, noting this deal could lay the groundwork for further deals with major pharmaceutical companies both domestically and abroad.

“Moving forward, there’s no doubt some of these other larger pharma companies – knowing that GSK have done the deal with us – will come knocking on the door to potentially see what we’ve got, why GSK would take our product, and what they could do with us.”

Mr Karafotias said he was immensely proud of the work his team did to get this latest arrangement over the line. 

“We are a small team here, a very nimble team but a very experienced one. To be able to go through a 12-month process and secure this arrangement just shows to me that we have the right people in the right places and I’m proud to work with them,” he said.

“What excites me is what possibilities this initial arrangement will bring to the company.”

Spending on pharmaceuticals growing

Wellnex’s announcement comes amid growing consumer demand for health and wellness products. 

Household spending intentions data collected by Commonwealth Bank shows Australians intended to spend 2.6% more on health and wellness goods in February this year compared to the previous month.

Although an increase of this size is slightly weaker than the bank wo

uld normally expect, it noted health and wellness spending intentions were up 11.1% on a yearly basis.

“Relative to February 2021, February 2022 saw increases in spending on: pharmacies, health and beauty spas, commercial and professional sport, opticians, orthopaedic services, podiatrists, doctors and dentists,” the report said.

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Reach Corporate provides corporate advisory services to WNX and has been engaged by WNX to manage its investor communications.

Sources

• Wellnex Life ASX Announcement, Wellnex Life Signs Supply Agreement in Australia and New Zealand with GlaxoSmithKline
• Comm Bank, Household Spending Intentions –Feb 2022