Viatris has been trying to reinvent itself since it formed through the merger between Mylan and Pfizer’s Upjohn, in part by selling non-core assets. Now, the company reportedly has a new divestment target in mind.
Viatris is considering a sale of its consumer health products in Europe in a deal that could fetch 3 billion euros ($2.9 billion), Bloomberg reports, citing people familiar with the matter.
The drugmaker has tapped Jefferies to scout for buyers, but no final decisions have been made, the people said, according to Bloomberg.
Viatris didn’t immediately reply to a Fierce Pharma request for comment.
A European over-the-counter sale would follow some smaller OTC castoffs in the U.S. The generics giant recorded $96.7 million in proceeds from asset sales in 2021, which it attributed “primarily” to a group of U.S. OTC products.
The report also comes as Viatris works to wrap up a $3.3 billion deal to shed its biosimilars portfolio to partner Biocon Biologics. The companies unveiled that transaction in February and expect it to be complete by the end of the year.
When announcing the biosimilar deal, Viatris CEO Michael Goettler said the company has identified additional sell-off targets to simplify its business. All told, Viatris hopes to generate up to $9 billion in pretax proceeds from these initiatives by the end of 2023. The European OTC sale, if it becomes a reality, would likely count toward that goal.
As to how Viatris plans to spend the money, Goettler said during an August conference call that the “base” goal is to meet the company’s financial commitments for 2022 and 2023. These include paying dividends to shareholders and paying down debt. As for share buybacks and business development, “we’ll make those decisions with value for shareholders in mind at the right time and for the right reasons,” the CEO said.
Consumer health products aren’t exactly Viatris’ focus these days, and they rarely came up during public discussions with investors. Like many other biopharma companies, Viatris is now more interested in innovative products with higher profit margins. The company has identified ophthalmology, gastrointestinal diseases and dermatology as its areas of focus.
Across the industry, pharma companies are increasingly distancing themselves from OTC products in favor of novel therapies. GSK just spun off its Pfizer consumer health franchise into Haleon, and Johnson & Johnson is in the process to do the same with its own consumer health business, to be called Kenvue. As one of the last Big Pharma holdouts, Sanofi has been slimming down its OTC franchise, shifting its focus to switching prescription meds into first-in-class OTC options.
The Viatris European OTC franchise could draw interest from private equity firms that want to beef up their existing OTC businesses or a drugmaker that wants to grow its business in Europe, Bloomberg's sources told the news service.