Sanofi, Merck, others said to be eyeing Bausch buyout

Bausch & Lomb, which has been building its prescription drug business, is drawing enough attention from Big Pharma names such as Sanofi ($SNY) and Merck & Co. ($MRK) that its private equity investors may just sell it instead of going the IPO route.

The company has hired the Goldman Sachs Group to see just how deep interest goes, according to The Wall Street Journal, citing unnamed sources. It is owned by Warburg Pincus, which paid $3.7 billion for the company in 2007 when it was having issues. Warburg figures it may be worth $10 billion to major drug manufacturers that like its pipeline of drugs and steady consumer business in contact lenses and related paraphernalia. Goldman this month began running the traps with drugmakers such as GlaxoSmithKline ($GSK), Sanofi and Merck & Co., a source told Bloomberg, and has others on its GPS.

While many think of Bausch & Lomb as only a consumer business, it also makes a number of prescription drugs, including steroid eye drops Lotemax and Besivance, used to treat bacterial infections. It has also built a pipeline of products, including a treatment for dry eye disease. It has been trying to license some of its Phase II and Phase III compounds to drugmakers needing to build their own pipelines.

Bausch & Lomb has itself been on the buying end of a deal this year, having agreed in March to pay about $500 million for eye-drug company ISTA. Bausch & Lomb already made many of ISTA's products. The deal added ISTA's product pipeline to its own, as well as products such as Bromday, a drop for cataract surgery patients.

If a deal does not materialize, sources point out the IPO route remains open.

- read the Wall Street Journal piece (sub. req.) 
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