Johnson & Johnson ($JNJ) is said to be shopping its API manufacturing unit Noramco in a deal that could fetch up to $800 million.
Citing sources "familiar" with the deal, Reuters said buyout firms appear to be the most interested in the division, which manufactures the active ingredients in painkillers like oxycodone. The unit had annual earnings before interest, taxes, depreciation and amortization of more than $70 million.
The source declined to be identified due to the confidential nature of the sale talks. Johnson and Johnson officials also declined to comment to the news service.
In 2014, GlaxoSmithKline ($GSK) and Johnson & Johnson, which control most of the needed opium supplies for the industry, began lobbying authorities to approve genetic engineering so opium farming can be both expanded and made less susceptible to pests and so they can assure their customers they can keep up with demand.
Tasmania produces about 85% of the global supply of thebaine, the opium poppy extract used to make Oxycontin and other similar drugs. It produces all of the oripavine in the world, used to make treatments for heroin overdoses. It produces 25% of the world supply of morphine and codeine, which continue to be used widely outside of the U.S.
- read the Reuters story