MEDA May Be Looking to Offload U.S. Operations Worth $1 Billion, Sources Say
August 28, 2015
By Alex Keown, BioSpace.com Breaking News Staff
GOTEBORG, Sweden -- Could Meda AB be selling off its U.S. operations? Some sources are suggesting a deal could be in the works.
Late Thursday, Bloomberg Business, citing “people familiar with the matter,” reported Sweden-based Meda was exploring options to sell off its U.S. operations which have an estimated value of $1 billion. Meda, which divested itself of a manufacturing unit in New Jersey last year to the contract manufacturer DPT, has retained the financial advisory firm Rothschild as it possibly explores options. Meda though, said it would not discuss any potential business deal.
“With regard to the current rumors concerning Meda’s US operations, Meda states that business development is a natural part of the business model. This includes, amongst others, acquisitions, divestments, in-licensing and partnerships. Evaluating the US operations is one project. However, Meda’s policy is not to comment on these activities,” the company said in a statement this morning.
Meda's stock hit a high of $137 per share before closing at a low of $127.70 per share following news of the possible divesture. This morning, the stock is back on the rise, currently trading at $129.70 per share.
If Meda sells off its U.S. branch, the parent company could use the proceeds to pay off debt, or use the funds for its own M&A plans. This year there has been more than $250 billion spent on M&A activities in the pharmaceutical industry.
The Swedish company’s U.S. business, known as Meda Pharmaceuticals Inc., manufactures a number of aerosols for asthma and sinus issues, including the asthma drug Aerospan and Dymista, as well as several products for female therapies, including Elestrin, an estrogen therapy. Meda acquired Aerospan in the 2013 acquisition of Acton Pharmaceuticals for approximately $150 million. The deal was seen as a move to expand Meda’s position in the respiratory drug market. In February, Dymista was approved by the U.S. Food and Drug Administration (FDA) for use in children 6 to 11 years old who have seasonal rhinitis. Dymista had previously been approved only for adults and children 12 and older.
If Meda does indeed plan to divest itself of its U.S. holdings, there are a number of companies bolstering their respiratory offerings that could snap up the company and its pipeline of respiratory medications. Earlier this year, AstraZeneca PLC acquired the rights to Actavis plc ’s branded respiratory business in North America. The $600 million deal provided AstraZeneca with Tudorza Pressair, an aclidinium bromide inhalation powder, which is a twice-a-day medication for chronic obstructive pulmonary disease (COPD), and Daliresp, a once-daily oral PDE4 inhibitor for COPD. In 2014, the two medications had a combined annual sale of $230 million in the United States. At the time of the deal, Paul Hudson, president of AstraZeneca U.S., said the acquisition of the Actavis products builds upon the company’s 2014 acquisition of Almirall's respiratory portfolio.
AstraZeneca has a long history in the manufacture of respiratory medications. The company is the maker of Symbicort and Pulmicort, two medicines used to treat asthma and COPD. Additionally, AstraZeneca manufactures COPD drugs, Eklira Genuair, Tudorza Pressair and Duaklir Genuair.