November 14, 2014
By Riley McDermid, BioSpace.com Breaking News Editor
Private equity shop Apollo Global Management (APO.N) is planning to bid for all GlaxoSmithKline ‘s mature prescription medicines pipeline in a much-anticipated auction that could bring in as much as $3 billion, four people familiar the matter told Reuters yesterday.
The brands on offer include well-known names such as nausea drug Zofran, antidepressant Paxil, stomach acid reducer Zantac and migraine treatment Imitrex. GSK will retain the rights to the products in emerging markets.
The auction was previously expected be run as a piecemeal offering, but Apollo is prepared to buy all of the products on offer at once, said the news service. GSK has asked for final bids by the beginning of next week from potential bidders including Danish biotech Lundbeck, private equity firm KKR and specialty drugmaker Norgine. Indian biopharma firm Lupin has not said it will still participate in the auction.
Apollo is run by activist investor Leon Black and might have a trickier time actually producing and selling the brands, because GSK will not be selling any factories at the auction. That would place the burden on firms like Apollo and KKR outsource manufacturing and distribution operations should they win the bidding.
GSK has been looking to unload the suite of drugs, which are sold in North America and western Europe, as a way to slim down its pipeline and improve growth in the near future. Analyst have projected the drugs on offer to have combined 2014 sales of around $1.6 billion, but GSK wants an eventual sales total of more than twice that, said the unnamed sources.
GSK is being advised by Lazard and has said it will likely sell the drugs by the end of the year. It did not comment on the Reuters report Thursday, but GSK Chief Executive Andrew Witty said last month that the auction was proceeding as planned.
