Nordic Capital, Wendel in two-way race for $1.6B LTS Lohmann deal

Two buyout firms are duking it out for LTS Lohmann, a drug-patch maker partly owned by Novartis ($NVS), Reuters reports. Now that the dust has settled on first-round bids, which were due last month, Wendel and Nordic Capital are still in the running for a deal worth about $1.6 billion.

LTS Lohmann makes nicotine patches and other transdermal drugs, including treatments for Parkinson's disease and restless-legs syndrome. According to Reuters, the company brings in about €286 million ($386.7 million) in annual sales.

For Nordic Capital, buying LTS Lohmann would offer the opportunity to merge its operations with a skin-patch maker it bought last month. Nordic and private equity partner Avista Capital Partners together bought Switzerland-based Acino, which turns out a birth-control patch for Bayer, among other products.

Blackstone had similar ideas; the firm had been chasing after LTS Lohmann with an eye to combining it with Catalent, which also does contract manufacturing. Both Blackstone and KKR--which owns Capsugel, a capsule-making business once owned by Pfizer ($PFE)--have lost interest, however, Reuters' sources say.

Drugs delivered via skin patch are increasingly common as drugmakers look for new ways to sell old products. Beyond the usual skin-patch categories--such as painkillers, nicotine and hormonal birth control--drugmakers are selling a migraine treatment patch (Nupathe's Zecuity) and an Alzheimer's drug patch (Exelon, Novartis), among many others.

In fact, Novartis is LTS Lohmann's biggest customer. The Swiss drugmaker owns 43% of the company and relies on it for patch manufacturing. Another 30% is in the hands of German billionaire Dietmar Hopp, and Germany's BWK controls the rest.

- get the story from Reuters

Special Report: Top Biopharma M&A Deals 2012