Even while fighting a pitched battle for control of Human Genome Sciences, GlaxoSmithKline ($GSK) managed to negotiate the sale of another portfolio of low-margin drugs.
GSK says it has sold its"Classic Brand" portfolio in Australia for about £172 million ($270 million) in cash. On the receiving end is South Africa-based Aspen Global, which says the price could be reduced if the deal does not close by Oct. 31, Reuters reports. GSK says it expects to net £121 million ($189.9 million) on the sale. This deal comes only months after it unloaded the rights to its over-the-counter drugs in North America and Europe in separate transactions.
The Australian sale includes such products as Valtrex and Amoxil. The Classic Brands grossed about £31 million ($48.6 million) in the first half of this year and £83 million ($130.2 million) in 2011, but GSK says sales have been declining for several years as generic competition has taken a toll.
In March, the British company announced the sale of its European consumer drugs--including the stomach drug Zantac--to Omega Pharma in a deal valued at $612 million. That came about three months after it unloaded the North American OTC portfolio of 17 products to Prestige Brands Holdings ($PBH) for a total of $660 million in cash. Prestige picked up the rights to BC, Goody's and Ecotrin brands of pain relievers, as well as other well-known names including Beano, Gaviscon and Tagamet.
That means Glaxo will have netted more than $1.4 billion, which will go quite a ways toward paying for the $3 billion acquisition of HGS. It got that done after waging a months-long proxy fight. GSK has already turned out the old guard there, but now must find its way to turn that big buy into profits for itself.
It has promised that the deal will raise core earnings by next year and says it expects to squeeze $200 million in savings from the consolidation by 2015. It also picked up the full rights to Benlysta, a lupus treatment approved to great fanfare last year, but so far the drug hasn't performed up to expectations.
- here's the release
- and more from Reuters
Glaxo nabs HGS for $3B after months of wrangling
Prestige buys rights to GSK OTC meds for $660M
GSK offloads consumer brands to Omega, delays Alli sale
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