Reckitt Benckiser To Demerge Rx Pharma Business; To Invest in UK R&D CenterBy
Reckitt Benckiser (RB) announced it will pursue a demerger of its pharmaceuticals business, RB Pharmaceuticals, following a strategic review of the business. The company said that it will work over the next 12 months to demerge the business with a separate listing on the London Stock Exchange. RB Pharmaceuticals includes the company’s prescription drugs business, and the company will focus on its core businesses in consumer healthcare, hygiene, and home care.
“We believe that RB Pharmaceuticals has the potential to deliver significant long term value creation as a stand-alone business,” said Rakesh Kapoor, chief executive officer of RB, in a company statement. “We have therefore decided to pursue a demerger of RB Pharmaceuticals with a separate UK listing. We expect this to take place over the next 12 months. This will also allow RB to focus on its core strategy to be a global leader in consumer health and hygiene.”
RB Pharmaceuticals key product is Suboxone (buprenorphine and naloxone), a partial-opioid agonist indicated for the treatment of opioid dependence. The patent for Suboxone expired in the US in 2010 and has faced increased generic competition. The company discontinued the tablet form of the drug in March 2013 and subsequently introduced a sublingual film. In 2013, RB Pharmaceuticals posted revenues of Â£777 million ($1.32 billion), an 8% decline year over year. RB Pharmaceuticals posted first-half 2014 revenues of Â£344 million ($583 million), a decrease of 8% year over year.
Separately, RB announced it will invest Â£100 million ($169 million) in its consumer health R&D operations with the creation of a Center of Scientific Excellence to be based in the UK One of six major RB R&D facilities worldwide, the new UK center will become the global technical innovation hub for products such as Nurofen, a pain management product, and Strepsils, to treat sore throats and cold symptons. The decision to locate the new center in the UK at the company's Hull site followed a review which considered RB's other R&D center locations across the globe. “The decision reflects both the existing consumer health expertise in the UK and the UK Government's positive attitude towards encouraging innovation, science and technology,” said the company in a release.
The project will include the development of a major new building on the site equipped with consumer-health laboratory facilities. RB's objective is to make the center a “magnet for talent” for technical science expertise. In addition, RB will be upgrading the current home care category R&D facilities in Hull and completing work already begun on general improvements across the site. Work has already begun on the design and planning aspects of the project and RB expects building work to start early in 2015 with the new Center of Technical Expertise to be fully operational by early 2018.
Earlier this year, RB was one of the suitors for Merck & Co.’s consumer healthcare business, which eventually Bayer agreed to buy.
See related story, “Novartis, GSK, Bayer and Merck Become Movers in the OTC Market.”
Source: RB (Center of Excellence) and RB (Demerger of RB Pharmaceuticals)