LONDON / NEW YORK (Reuters)
— Sanofi SA is looking to
sell a portfolio of older drugs that could fetch $7-8 billion,
according to people familiar with the matter, yet another example of
drugmakers trying to shed non-core assets and focus on high-growth
The French pharmaceutical firm has hired financial
advisers Evercore Partners Inc to help it with a deal and has
contacted potential buyers in the past few months, the people said,
asking not to be named because the matter is private.
The drugs for sale include treatments for high blood pressure and
cardio-metabolic diseases and account for roughly $3.7 billion in
combined annual revenue, one of the people said.
The portfolio could fetch up to two times that amount, the person
Shares in Sanofi rose 1.5 percent in early trade on Wednesday
following the news.
Generic drugmakers and specialty pharmaceutical companies are seen
as logical buyers for the portfolio, said the people familiar with
A spokesman for Sanofi said: "We do not comment on market rumors."
Evercore also declined to comment.
Drug companies are increasingly looking to shed smaller divisions
they view as non-core so they can better focus on their mainstay
products. They have also shown willingness to consider large asset
swaps with rivals to exit weaker businesses and reinforce core areas
where they are already top players.
Novartis AG last week announced a major revamp in which it traded
more than $20 billion worth of assets with GlaxoSmithKline Plc and
agreed to sell its animal health arm to Eli Lilly and Co.
Merck & Co Inc is also in the final stages of selling its consumer
health unit for close to $14 billion, Reuters reported last week, as
its market share in the sector is seen as sub-scale compared with
those of market leaders.
The Novartis deal, in particular, is seen as a template for others
in the pharmaceuticals industry to follow and it could also apply to
other industries, such as consumer goods.
Sanofi has an extensive line-up of older products that could be
carved out, following similar moves now under way at Pfizer Inc and
GSK to place older products in separate divisions.
Pfizer announced last year it planned to separate its business
into three units — innovative pharmaceuticals; vaccines, oncology
and consumer health; and established products — and the U.S. group
has not ruled out a full breakup.
GSK is starting out down a similar path and will announce the first
separate results for its established products business when it
reports quarterly results later on Wednesday.
Sanofi Chief Executive Chris Viehbacher said on Tuesday he did not
plan to embark on large-scale deals, despite a current merger frenzy
in the healthcare sector, but would continue with a strategy of
smaller transactions and bolt-on acquisitions.
(Additional reporting by Ben Hirschler;
editing by Steve Orlofsky,
Bernard Orr and Mark Potter)