Boehringer Ingelheim has been struggling under the weight of slumping sales and patent expirations for some of its top products, shedding jobs and unloading assets to lighten its load. The German company could be set to slim down further, as it considers selling its U.S.-based generics unit for up to £2 billion ($2.33 billion) to focus on developing new drugs.
Boehringer is exploring its options for Columbus, OH-based Roxane Labs with Morgan Stanley, but has not yet decided whether to move forward with a sale, company spokeswoman Kathy Vincent told FiercePharma in an email. Roxane is experiencing strong business performance and has a successful track record of regulatory compliance, she said. The business develops and markets Boehringer’s generic drugs and has about 1,300 employees.
“Boehringer Ingelheim is confident that there may be other strategic options that can better support the already successful Roxane Labs business and its significant future potential,” Vincent said.
A sale of its U.S.-based generics business would allow the company to focus on branded drugs in the States, now that it has sold off its generic injectables unit, Ben Venue Laboratories, based in Ohio. After years of quality-control problems at its Bedford, OH, plant, Boehringer unloaded Ben Venue Labs to Jordan’s Hikma Pharmaceuticals for $300 million in cash and milestone payments, and handed off the plant to the company in a separate deal.
Boehringer also reported a 5% drop in sales during the first 6 months of 2014 and downgraded its forecasts for the year, saying that it needed to get its house in order before moving forward with newly approved drugs. The company in September announced that it would cut between 500 and 600 jobs in its home country in a bid to save $580 million.
“In the first 6 months we have brought many important issues to a favorable conclusion. We can now concentrate all our efforts on the development and launch of new medicines and on the expansion of our biopharmaceutical business,” board chairman Andreas Barner said at the time.
Meanwhile, the company could be exploring an asset swap with competitors to beef up business, Reuters reports. Boehringer would follow in the footsteps of other pharma heavyweights that forged similar deals last year. In April, Novartis and GlaxoSmithKline engineered a multibillion-dollar asset swap, with GSK selling its oncology business to the Swiss drugmaker and picking up the latter’s vaccines unit. The two companies also setup a consumer health joint venture to market over-the-counter products with an estimated $11 billion in sales.
Other drugmakers have hived off older brands and sold generics units to better focus on their branded businesses. For example, AstraZeneca in September sold off 18 of its aging meds to specialty generics maker IGI Laboratories. Sanofi also considered unloading some of its aging products, but the company’s plans stalled due to internal squabbles regarding the sale.
By Emily Wasserman