Reckitt Benckiser may shed pharma unit
pharmafile | October 23, 2013 | News story | Sales and Marketing | Reckitt Benckiser Pharmaceuticals, rbp, suboxone
Reckitt Benckiser Pharmaceuticals is considering selling its pharma unit within the next year after the recent loss of its biggest selling product Suboxone.
The UK firm believes its drugs unit is not core to the group’s wider consumer goods business, and analysts believe it could make more than £2 billion ($3.2 billion) from a sale.
The company wants instead to focus on its core brands such as Nurofen painkillers, Finish dishwasher tablets, Dettol disinfectants and Durex condoms.
This also comes as RBP lost exclusivity in 2009 for its top-seller, the heroin substitute Suboxone. Earlier this year the FDA approved two generic alternatives to the drug, decimating sales and prompting a potential sale.
Rakesh Kapoor, Reckitt’s chief executive, said: “Regarding RBP, we are commencing a strategic review of the business and will consider all options for maximising value for our shareholders. We expect the review to take some time and will update shareholders during the course of 2014.”
This is a reverse of strategy from other companies such as Pfizer, which recently shed its consumer units to focus more heavily on pharmaceuticals. But Pfizer’s situation is very different compared to Reckitt given that it has a stronger branded drug portfolio, but was failing to see major growth from its consumer units.
Graham Jones, an analyst at Panmure Gordon, told the Financial Times that the pharma division was probably worth about £2 billion. “The pharmaceuticals business has always sat slightly on the side of what [Reckitt] does. They need to sell this to a proper pharmaceuticals company and move on with the job of being a consumer brands company.”
For the first nine months of the year, total revenue when excluding the pharmaceuticals business was £6.95 billion according to newly-posted quarterly results.
Looking ahead the company put its target for full-year net revenue growth up slightly, excluding the pharmaceuticals business and including the impact of acquisitions and divestments.
Ben Adams
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