UCB follows trend to cut pharma, Quits US generics business for $ 1.53B
November 7, 2014 | By Emily Wasserman | bionetwork
With the pharma craze cutting back, Belgium's UCB is still in action, selling its US generics unit for $1.53 billion.
UCB will divest the Kremers Urban Pharmaceuticals, the US branch of UCB of Princeton, NJ to a private equity firm of Advent International and Avista Capital Partners, and plans to use the proceeds to reduce its debt load and beef up its product pipeline, the company said in a statement. UCB's Board of Directors unanimously approved the sale, and the deal is expected to close within the first quarter of 2015.
The sale also gives UCB the opportunity to focus on its core neurology and immunology businesses, the current chief executive said in a statement. Roch Doliveux. The company's epilepsy drug, Keppra, went off-patent in 2011, and UCB has since built its product pipeline to fill the sales gap. The top-selling products are Cimzia, an anti-inflammatory treatment for Crohn's disease and rheumatoid arthritis, and Vimpat, approved as an adjunctive therapy for partial-onset seizures in adult patients with epilepsy, and UCB expects sales to peak at at least € 1,200,000,000 ($1.6 billion) for both drugs.
The CEO-Elect of UCB Jean-Christophe Tellier (right photo) said in a statement: “Our core business is growing and UCB has an increase sooner than expected and
the recent phase of production lines now allow us to focus even more on providing innovative solutions for patients living with serious diseases,”. The company in February named Tellier (biography) head of brands of its biopharma unit, since March 2015, and will replace the current CEO Doliveux.
However, some analysts are questioning what the deal could mean for UCB's bottom line. The company's Kremers unit is more profitable than UCB as a whole, and it's unclear how the company has met its profit margin goals without it, it wrote in a note to investors. Bloomberg an analyst at KBC Securities.
But UCB is far from the only company looking to divest some non-core assets. Some Pharma heavyweights such as Merck ( MRK $ ), GlaxoSmithKline ( GSK $ ) and Sanofi ( $ SNY ) are also trying to slim down their wallets and make room for new products. In September, AstraZeneca ( $ AZN ) divested 18 unmarketed drugs, selling the generic products to specialty manufacturer IGI Laboratories for $ 500,000 upfront, and over $6 million in stages and up to $ 3 million in royalties. In October, Sanofi plans to spin off its stalled old drug portfolio for $8 billion as management executives could not agree on how to move forward with the sale.
Novartis ( $ NVS ) in April made one of the largest trade changes in the industry, obtaining GSK's cancer portfolio in exchange for its vaccines unit, and selling its animal health business to Eli Lilly ( $ LLY ) and forming joint ventures with Glaxo on consumer healthcare products, all in an effort to focus on branded drugs, eye care products and generics.
– UCB document release (PDF)
– Read about more on Bloomberg
Related news: UCB sells generics business in the US for 1.53 billion
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