When talking about “older” drug brands, most of what we are seeing here are drugs have expired patents so there’s generics available. Some of the drugs in question include Imitrex, a migraine treatment, Zofran, for nausea , and Seroxat, an antidepressant. Private Equity firms have never played in this game before and interested parties include Blackstone, KKK, Bain and a few others.
There’s a lot of restructuring going on with pharmaceutical companies and it would be interesting to see how a PE firm would manage such an asset, and that’s not to say it can’t be done but when ownership type changes, the assets enter a whole new portfolio to where pharmaceuticals are not the only vertical represented. In addition other Pharma companies are making specific acquisitions with one or two product lines. At the end of May of this year is when Glaxo had officially put out invitations to bid on their older drugs and they especially want to dump the American and European mature markets.
This could get interesting with having PE firms that are not drug companies owning pharmaceuticals. BD
Private equity groups are exploring a $10bn plan to buy hundreds of older drug brands from GlaxoSmithKline and Sanofi and merge them, highlighting the continued intense deal activity sweeping the pharmaceuticals sector.
KKR and Warburg Pincus are among those weighing bids for the GSK and Sanofi assets – and looking at a possible combination of the two portfolios, according to several people familiar with the matter. KKR and Warburg Pincus declined to comment.
GSK said last week that it had received “very significant” indicative bids from private equity companies and midsized drugmakers in a portfolio of mature products with annual sales of about £1bn.
Sanofi, meanwhile, is considering the sale of about 200 older drugs with annual revenues of at least €2.1bn. Those assets alone have an enterprise value of €6.3bn, according to internal Sanofi documents leaked by a labour union last month.