Patch maker LTS Lohmann collecting first-round bids in possible €1.4B deal

Bidders are circling a drug-patch maker partly owned by Novartis ($NVS). LTS Lohmann has set a mid-October due date for first-round bids, Reuters reports, with info packets sent to buyout firms active in healthcare. With annual sales of about €200 million, or about $265 million, LTS Lohmann is expected to bring anywhere from €1 billion to €1.4 billion.

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, Reuters reports. 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, the news service notes, and Germany's BWK controls the rest.

Skin-patch manufacturing is specialized, and key players are upping capacity. Generics maker Mylan ($MYL) cut the ribbon last week on an expanded transdermal patch facility in Vermont, and Teva Pharmaceutical Industries ($TEVA) has pegged growth fears partly on developing new drug delivery systems, including skin patches. Acino built a plant in Germany specifically to make Bayer's birth control patches, including a forthcoming low-dose version.

Morgan Stanley has been helping LTS Lohmann find a buyer for several months. The first bids are expected in the second half of October, Reuters' sources say.

- read the Reuters news

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