GSK pondering £7.5 billion drugs sale
pharmafile | May 30, 2014 | News story | Sales and Marketing | GSK, Paxil, ageing, drugs, established, imitrex, zofran
GlaxoSmithKline is looking to make more than £7 billion by selling off its ageing portfolio of established drugs.
This is according to Sky News which is reporting today that GSK has invited a small number of private equity firms – including Advent International, Blackstone and KKR – to consider making offers for some or all of the roughly 50 medicines in its established products portfolio.
These medicines include older drugs that are no longer making blockbuster sales for the firm, but could still be pulling in high revenue for small companies. Sky News says according to its source the assets could be worth as much as £7.5 billion in total.
Sales of established products reached a steady £814 million ($1.36 billion) in the first quarter of 2014, down 11% on the previous year, reflecting increased competition from cheaper generic copies.
But whilst these older medicines are declining they are still very profitable, making any potential arrangement attractive to certain investors.
GSK is making no comment on the plans yet however, and it remains unclear how interested the private equity firms are in pursuing any deal with the London-based firm.
GSK is highly unlikely to offload the entire portfolio, which includes Imitrex, a migraine treatment, the antidepressant Paxil and Zofran, which is prescribed to combat symptoms of nausea, as a single entity.
It is more likely to sell the rights to bundles of the products or individual medicines in order to maximise the value it can generate from any disposals, the source adds. Transactions may focus on licensing deals in the US or Western Europe rather than emerging markets.
This comes several months after GSK struck a unique deal with Swiss major Novartis in an ‘asset-swapping’ scheme. This pact sees the manufacturers combine their consumer health units under GSK’s majority (63.5%) control.
GSK will also sell its cancer portfolio to Novartis for a maximum of $16 billion, and in turn Novartis will let GSK acquire its own vaccines business for up to $7.1 billion.
But GSK has landed itself in hot water after it transpired the firm is under formal investigation from the UK’s Serious Fraud Office probe into its ‘commercial practices’.
Details remain sparse, but the probe follows allegations that its staff bribed doctors to prescribe its products in China and other overseas markets including Poland, Jordan and Iraq.
Ben Adams
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