Back to 2014? Pharma's unit sales and spins are trendy again, and they're not going away

Does it feel like we’ve time-traveled back a few years? The unit divestment, which seemed to fall out of favor last year as Big Pharma digested its new purchases, is back in full force.

In the past several weeks alone, we’ve seen Pfizer's consumer health unit drum up interest from GlaxoSmithKline and Reckitt Benckiser, while rumor has it Sanofi and Johnson & Johnson could have their eyes on the business, too.

Merck KGaA has an OTC unit up for grabs, too—albeit a smaller one—and rumored bidder Perrigo could find itself in competition with the likes of Stada and Nestlé, reports say.

Meanwhile, Novartis’ Sandoz, which is feeling the burn—along with the rest of its generics industry peers—of serious pricing pressure, now says it could unload its U.S. generics pill business, potentially through a spinoff.

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It would be tough to match the level of unit movement from earlier this decade. After a busy 2014 in which Merck & Co. sold Bayer its OTC business, Abbott Laboratories sold Mylan its ex-U.S., nonemerging markets generics business, and GlaxoSmithKline and Novartis agreed to a multibillion-dollar asset swap, 2015 brought even more. Allergan inked a $40.5 billion generics sale that’s proved disastrous for buyer Teva, Bayer said goodbye to plastics unit Covestro, Eli Lilly vaulted past its animal health peers with the close of its Novartis Animal Health buy and so on.

But 2018 could give that year a pretty serious run for its money if the Pfizer, Merck KGaA and Sandoz cast-offs play out. Other moves could be in the works, too. Shire, for one, this summer said it was weighing options for its neuroscience business, while its activist investors are angling for a larger-scale breakup. Lilly is now “reviewing strategic alternatives” for that bulked-up animal health unit. And RBC Capital Markets analyst Randall Stanicky is rooting to see Allergan sell off its women’s health unit, a maneuver he thinks could raise up to $6 billion.

Of course, plenty of factors could change the plans of the likely sellers or spinners—including tax reform and the bevy of additional dealmaking options it could bring with it. For now, though, we’re going to enjoy the ride as pharma parties like it’s 2014.