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* GSK weighing disposal of established drugs in Westernmarkets
* Part of wider reshaping of British drugmaker's business
* Other pharma firms also reviewing mature drug portfolios
* GSK said to be in "no rush" to divest older non-coreassets (Adds detail on profitability, paragraph 11, closing shares,paragraph 13)
By Ben Hirschler and Freya Berry
LONDON, May 29 (Reuters) - GlaxoSmithKline hasinvited private equity firms to consider making offers for arange of its older drugs sold in Western markets, according tothree people with direct knowledge of the matter.
The move is part of a reshaping of the drugmaker's business,which also involves a major asset swap deal struck last monthwith Novartis.
Chief Executive Andrew Witty said last month that Britain'sbiggest pharmaceuticals company could dispose of individualmedicines or a broader portfolio of older established products.
A GSK spokesman had no further comment on the potentialdisposals on Thursday.
Private equity firms approached by GSK include AdventInternational, Blackstone and KKR, the sourcessaid, and the drugmaker is being advised by Lazard.Officials at Lazard and the three private equity firms declinedto comment.
GSK said at its first-quarter results on April 30 that itwas evaluating options to "maximise the value of our portfolioand currently reviewing our Established Products Portfolio". Theportfolio includes products such as the antidepressant Paxil,migraine treatment Imitrex and Zantac for stomach acid.
The company has started breaking out results for thesemature medicines for the first time this year as a prelude to apotential divestment of at least some of them.
"You should not be surprised if we were able to transact adisposal of some of that established product portfolio in thenext year or two," Witty told reporters last month. "That is notpart of our future."
One person familiar with GSK's thinking said it was in "norush" to dispose of the 50 or so older medicines in the divisionand it also planned to retain rights to most of the products inemerging markets, where they form an important part of GSK'sbusiness.
Sales of established products totalled 814 million pounds($1.36 billion) in the first quarter of 2014, down 11 percent ona year earlier, reflecting increased competition from cheapergeneric copies. Around half of those sales were made in emergingmarkets.
Although sales of these older medicines are declining, theyare still very profitable. Core operating profit for establishedproducts was 485 million pounds in the first quarter, down from609 million a year earlier, representing an operating margin of59.6 percent against 27.3 percent for the group as a whole.
The drugmaker's approach to private equity firms was firstreported by Sky News.
GSK shares ended 0.5 percent higher, after falling 1.6percent on Wednesday following news that Britain's Serious FraudOffice had launched a criminal investigation into the company'scommercial practices.
WIDER INDUSTRY TREND
GSK has already disposed of some non-core products. LastSeptember it agreed to sell thrombosis medicines Arixtra andFraxiparine to South Africa's Aspen Pharmacare for 700million pounds ($1.2 billion), or around two times their annualsales.
Assuming a similar sales multiple, the Western-markets halfof the current established drugs portfolio might be worth around3.25 billion pounds, based on the level of sales reported in thefirst quarter.
GSK's decision to review its portfolio of older prescriptiondrugs is part of a wider industry trend. Once companies divesttheir mature drugs, the remaining faster-growing and newerproducts can boost the top-line sales rate.
Pfizer, the biggest U.S. drugmaker, has created asimilar established products unit as a possible prelude toeventually divesting its mature drugs, and other firms areconsidering their options.
France's Sanofi and U.S. drugmakers Merck & Co and Abbott Laboratories are all exploringselling off some of their older drugs that have lost patentprotection, Reuters reported last month.
Finding a keen buyer, however, may not be so easy. Theappetite among rival drugmakers for such ageing assets islimited, leaving private equity firms as the most obviouspurchasers, since they can milk the cash flow without having toworry about the expense of drug development.
($1 = 0.5982 British Pounds) (Additional reporting by Anjuli Davies; Editing by Pravin Charand Keiron Henderson)
