GlaxoSmithKline (GSK), Britain's biggest pharmaceuticals company, has
approached potential buyers of brands including the ulcer remedy Zantac and
Seroxat, a well-known antidepressant.
Sky
News has learnt 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.
Based
on a frequently used valuation multiple of two times' annual sales, the assets
could be worth as much as £7.5bn in total, according to one source.
It
is unclear how interested the private equity firms are in pursuing any deal
with GSK.
GSK
is highly unlikely to offload the portfolio, which also includes Imitrex, a
migraine treatment, and Zofran, which is prescribed to combat symptoms of
nausea, as a single entity.
The
company 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 added.
Transactions
may focus on licensing deals in the US or Western Europe rather than emerging
markets.
News
of the approach to prospective private equity buyers comes in the same week
that GSK disclosed that it was the subject of a formal Serious Fraud Office
probe into its "commercial practices" following allegations that its
staff bribed doctors to prescribe its products in China and other overseas
markets.
A
spokesman for GSK echoed recent comments made by Sir Andrew Witty, its chief
executive, that it was open-minded about the future of the established products
portfolio.
"We
continue to evaluate options to maximise the value of our portfolio and are
currently reviewing [it], he said.
Lazard,
the investment bank, has been appointed to oversee discussions with potential
buyers.
At
GSK's first-quarter results announced last month, it said that sales from the
non-core portfolio fell by 11% to £814m "principally reflecting lower sales
of Lovaza, down 25%, and continuing generic competition to a number of products
across the portfolio, including Seroxat/Paxil, down 15%, and Malarone, down
34%".
The
company has already begun selling some non-core products, announcing an
agreement last September to sell thrombosis brands Arixtra and Fraxiparine to
Aspen, the South African drugs group, for £700m. GSK owns an 18.6% stake in
Aspen.
GSK
has been active in reshaping its business in recent months, unveiling a
three-part transaction with Novartis which involved the British company
acquiring its Swiss rival's vaccines arm and its oncology division moving in
the opposite direction.
Sir
Andrew effectively ruled out acting as a 'white knight' during Pfizer's recent
pursuit of AstraZeneca, which ended, at least temporarily.