BMS in $438m OTC deal
pharmafile | February 14, 2013 | News story | Sales and Marketing | BMS, Reckitt Benckiser
Bristol-Myers Squibb has signed over the rights to sell, distribute and market half a dozen of its medicines, mainly sold in Mexico and Brazil, to Reckitt Benckiser.
RB is paying $438 million up front for the exclusive rights in a bid to build its consumer healthcare presence in Latin America.
It is also paying a $44 million option fee that could see it purchase outright the brands – which had an unaudited reported net revenue of $102 million in 2012 – at the end of the agreement.
The deal gives BMS cash and space to concentrate on its more pressing interest: getting medicines for high unmet need into emerging markets.
“This agreement allows us to increase our focus on the launch and commercialisation of our innovative portfolio in these important markets in Latin America,” said chief financial officer Charles Bancroft.
The medicines which RB will take over in Mexico are Picot (antacid), Tempra (pain relief), Micostatin (antifungal) and Graneodin (cough treatment). The ones on the Brazilian market are Dermodex (anti-rash cream), Luftal (anti-gas) and Naldecon (cold and flu).
BMS will still be responsible for manufacturing them all – either on its own or via third parties – for the term of the agreement, and RB will pay royalties on sales.
RB chief executive Rakesh Kapoor said: “This transaction creates a material consumer healthcare platform, infrastructure and distribution network for RB in both Brazil and Mexico.”
He pointed to the brands’ strong margins and added: “I firmly believe they have extremely good growth potential.”
The products certainly chime with the group’s existing portfolio, and Kapoor claimed they would benefit from RB’s consumer marketing ability and experience of brand management.
If RB does decide to buy the OTC medicines, it will pay a sum based on average net sales during the two years prior to the sale, and receive sales, marketing, and distribution rights plus assets such as their trademarks.
None of BMS’s manufacturing facilities will form part of the deal, BMS insisted.
Among RB’s major existing brands is Nurofen: 18 months ago it was at the centre of a recall scare in the UK after some packs of Nurofen Plus were found to contain AstraZeneca’s antipsychotic drug Seroquel XL.
Adam Hill
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