German drug giant Merck KGaA is reportedly considering selling its $1-billion global consumer health business, including that in India, in a move that the German drugmaker said will be an important step in executing its science and technology-focussed strategy.
Merck, which traces its roots to a 17th century pharmacy, is focusing its healthcare division on drug development, pinning growth hopes on cancer immunotherapy treatment Bavencio and multiple sclerosis pill Mavenclad after a string of setbacks.
The company is preparing for “strategic options” for its consumer health business globally, Merck, the listed Indian subsidiary of the German major, notified the Bombay Stock Exchange on Tuesday. This includes a potential full or partial sale of the business as well as strategic partnerships, it stated.
“Consumer health is running a strong international business with a number of leading products in attractive over-the-counter (OTC) categories. The business focuses on consumer-centric solutions, driven by global mega trends and achieved net sales of €860 million in 2016. With well-recognized and highly respected brands and products such as Bion, Femibion, Nasivin, Neurobion, and Seven Seas, consumer health has a diversified product portfolio and strong market positions both in developed and emerging markets,” said the company’s release.
“The
ongoing strategic portfolio shift within the healthcare business sector have supported this strategy,” the company release said, citing the recent approvals of Bavencio (Avelumab) in the area of immuno-oncology and Mavenclad (cladribine tablets) for the treatment of highly active relapsing multiple sclerosis as examples of Merck’s successful development of innovative medicines.“We expect increasing internal constraints to fund the business to reach the required scale. Fully anticipating this, we are preparing strategic options,” Belen Garijo, chief executive of Merck’s entire Healthcare division, said in a statement.
“Any possible proceeds from a potential transaction would be used to deliver on the company’s overall financial targets,” she said.
In India, Merck’s consumer health business is one of the largest in supplying vitamins, minerals and supplements (VMS), with flagship brands such as Neurobion, Polybion and Evion growing twice above the category growth, according to the local company’s 2016 annual report. The group’s total healthcare business achieved net sales of euro 6.86 billion, with the Asia-Pacific region contributing 21% to this. The company sells a broad range of over-thecounter products for the treatment of minor ailments like muscle, joint and back pain as well as remedies for cold and headache. It also offers probiotic food supplements, especially for women and children.
