Sector News

Bayer sees IPO cash as war chest for new consumer deals

November 24, 2014
Life sciences
Once Bayer raises the billions it anticipates from an IPO of its plastics business, it plans to pay off debt. But after that? Expect some OTC acquisitions, the company’s CEO says.
 
Bayer is spinning off plastics in a move away from its chemical roots, preferring to focus on its fast-growing pharma unit and its assets in an expanding consumer health space. The proceeds will help Bayer march toward its goal of becoming the largest OTC player in the world, chief exec Marijn Dekkers told the Financial Times, tabbing the consumer health market as an “obvious consolidation play.”
 
To see that, one just needs to look at the array of different suppliers to the shelves of pharmacy giants like Boots in the U.K., he points out. “That means that nobody has really optimized their relationship with Boots yet,” he told the paper.
 
And Bayer wants to be at the front of the pack. It’s shown as much so far this year, grabbing China’s Dihon Pharmaceuticals before shelling out $14.2 billion for Merck’s consumer unit.
 
“We believe that critical mass is important,” he told the Times. “You need to be a large player there. If you don’t participate in consolidation you fall behind, and that is competitively dangerous.”
 
Other drugmakers have received that memo, too. Fellow pharma giants GlaxoSmithKline and Novartis this April agreed to team up on a consumer health joint venture, which will take the top spot in the OTC market after the deal closes next year. And then there’s Perrigo, which will vault into the top 5 after inking a $4.5 billion deal for Belgium’s Omega Pharma last month, the FT notes.
 
As Bayer looks to snap up future OTC targets, it might have a slew of additional competitors to fend off, too. Sanofi, for one, has actively grown its consumer health business since buying out Tennessee’s Chattem, and it was rumored to be a potential bidder for Omega–along with Bayer itself. Reckitt Benckiser, which entered a two-horse race for the Merck unit this year before ceding it to the German company, plans to spin off its underperforming pharma unit to double down on OTC, too.
 
By Carly Helfand
 

comments closed

Related News

January 29, 2023

Colorcon, Inc. signs Put agreement with intent to acquire controlled atmosphere packaging specialist Airnov Healthcare Packaging

Life sciences

Airnov provides critical healthcare industries with high-quality, controlled atmosphere packaging, to protect their products from moisture and oxygen. The business has manufacturing facilities in the USA, France, China and India and employs around 700 people.

January 29, 2023

Takeda pledges up to $1.13B for rights to Hutchmed’s cancer drug fruquintinib outside of China

Life sciences

Takeda of Japan has partnered with Hong Kong-based Hutchmed, gaining the commercial rights to colorectal cancer drug fruquintinib outside of China for $400 million up front, plus $730 million in potential milestone payments. Takeda also will help develop fruquintinib, which can be applied to subtypes of refractory metastatic colorectal cancer, regardless of biomarker status, the companies said.

January 29, 2023

Vir taps Bayer dealmaker Marianne De Backer as its next CEO

Life sciences

On April 3, Scangos, who’s been chief executive officer at Vir since the start of 2017, will hand over the reins to Marianne De Backer, Ph.D. De Backer comes over from Bayer, where she currently heads up pharmaceutical strategy, business development and licensing. Alongside her CEO appointment, De Backer is set to join Vir’s board of directors, the company said Wednesday.

How can we help you?

We're easy to reach