Stada aids GSK's consumer health spinoff plan with deal for 15 products

GlaxoSmithKline’s looking to sell some non-core over-the-counter products to help cover the cost of a consumer health spinoff. One company is more than happy to take some of those brands off its hands.

Stada has agreed to buy 15 GSK consumer drugs, mainly in Europe, for an undisclosed amount, the German generics maker said Monday. A person familiar with the deal told FiercePharma the transaction is worth at least €300 million ($325 million). Stada declined to comment on the financial terms or the bundle’s 2019 sales figure.

The portfolio to be transferred includes venous treatment Venoruton, cold drug Coldrex, vitamin C food supplement Cetebe, sore throat med Mebucaine and allergy remedy Tavegyl, among others.

“The brands being acquired, and their geographic presence, are well aligned with Stada’s core countries and our organic activities,” Stada CEO Peter Goldschmidt said in a statement.

A few weeks ago, GSK unveiled a two-year preparation program leading to the eventual spinoff of its Pfizer-partnered consumer health joint venture into a standalone entity. The British drugmaker aims to focus on innovative medicines and vaccines after the split.

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Along the way, the company expects the initiative will cost £2.4 billion ($3.1 billion), with about £1.6 billion of that in cash. It intends to fill about £1 billion with product selloffs.

Stada has taken over consumer brands from GSK before. The German company bought five consumer skincare brands and pediatric cough liquids Tixylix from GSK in a deal announced in June, about half a year after the GSK-Pfizer consumer merger became public.

Stada’s already a strong consumer health and generics presence in Europe with 2018 sales of €2.33 billion ($2.52 billion). “Under our ownership, we believe there is an excellent opportunity to revitalize and grow these consumer healthcare brands,” Goldschmidt said in the statement.

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And Stada thinks its existing European organization makes it the right partner to sell the products in the new GSK deal. “For GSK, maybe these are not the most important brands; for us, these mean a lot,” a Stada spokesperson said. “When you’re smaller, you put more efforts in it.”

Once the two wrap up the deal, as expected in the second quarter, Stada will also evaluate the opportunity to move those drugs’ production to its own facilities, the spokesperson added.

Since being taken private by Bain Capital and Cinven Partners in 2017, Stada’s been actively expanding its offerings. Besides the two GSK purchases, Stada recently also penned a deal to buy some 20 over-the-counter and prescription drugs in Russia, Georgia and several other Commonwealth countries from Takeda for $660 million, which marked the largest acquisition in Stada’s history. Like GSK's, the Takeda selloff was deal-oriented; the Japanese pharma is currently in the process of paying off debt it took on in its gigantic Shire buyout.