Warner Chilcott ($WCRX) is the latest drugmaker to stir up the M&A pot. The company is looking at its options, including a possible sale, Bloomberg reports, citing sources. Apparently, Warner started getting inquiries from private equity firms and potential industry buyers, so it brought in Goldman Sachs to help sort through the alternatives.
Warner is an Irish company that specializes in a few discrete therapy areas: women's health, dermatology, urology and gastroenterology. Its biggest drug is now Asacol, for ulcerative colitis, now that the bone drug Actone has seen sales tumble on generic competition. Other major products include the low-dose contraceptive pill Loestrin 24 FE. As Bloomberg reports, the company posted $2.7 billion in 2011 sales, but analysts are looking at a drop to $2.54 billion for 2012.
Cantor Fitzgerald analyst Irina Rivkind said a buyout would be "an ideal exit for Warner Chilcott," especially given its current trouble with manufacturing in Puerto Rico and government investigations of its marketing practices--and perhaps most importantly, generic competition.
Rivkind figures Bayer to be an ideal buyer, because of its strong presence in women's health. Indeed, over the weekend, London media reported that Bayer was eyeing a deal for Warner. The German company was said last week to be getting close to a multibillion-dollar healthcare deal. Bloomberg estimates Warner's value at $7.93 billion, based on a market cap of $4.69 billion, and Bayer has said it's looking for strategic deals.