|GlaxoSmithKline CEO Andrew Witty|
GlaxoSmithKline ($GSK) has already made some moves to sell off some of its older meds. But now, it's making more that could end up much, much bigger.
As Sky News reports, the pharma giant has solicited bids from a handful of private equity firms--Advent International, Blackstone and KKR included--for some or all of the 50 or so drugs in its established products portfolio, worth up to £7.5 billion ($12.6 billion). A spokesman for GSK told Sky the company is currently evaluating its options.
While it's unclear whether there's interest among PE firms, that portfolio, which encompasses brands like ulcer remedy Zantac and migraine treatment Imitrex, likely won't go to a single buyer. Instead, Glaxo is more likely to sell the rights to bundles of the products or individual meds to maximize the value it can generate by dumping the assets, a source told the news service.
Any brand-jettisoning GSK does shouldn't come as a surprise--and CEO Andrew Witty told reporters as much last month. As Reuters points out, the British company has started breaking out financial results for these aged meds as a precursor to any potential divestments.
Glaxo has already started the sell-off of some noncore products as part of a larger company reshaping, last September agreeing to send thrombosis brands Arixtra and Fraxiparine to South Africa's Aspen Pharmacare for £700 million ($1.17 billion).
GSK is not alone in its desire to unload some of its noncore products, which sank by 11% as a group in the first quarter of 2014. Pfizer ($PFE), keen for a breakup, has a similar established products unit, and Big Pharma peers like Merck ($MRK) and Sanofi ($SNY) have said they're exploring sales of drugs that have lost their patent shields.
Finding a buyer, though, may be easier said than done. As Reuters points out, rival drugmakers have limited interest in off-patent meds, leaving PE firms as the most obvious fit.
Special Report: The top 10 pharma companies by 2013 revenue - GlaxoSmithKline