Takeda Divesting Select OTC and Rx Drugs in Three Deals Totaling $1.7 BnBy
As part of a strategy to divest non-core assets to reduce debt following its $62-billion acquisition of Shire in 2019, Takeda has completed the sale of select over-the-counter (OTC) and prescription drugs and announced the sale of additional products from its Growth & Emerging Markets Business Unit in three separate deals totaling nearly $1.7 billion. The deals include completed deals to Stada ($660 million), Acino (over $200 million) and an announced deal with Hypera Pharma ($825 million).
Deal with Stada
Takeda has completed its previously announced sale of a portfolio of select products to Stada, a Bad Wilben, Germany-based pharmaceutical company, for a total value of $660 million. The portfolio includes approximately 20 over-the-counter (OTC) and prescription pharmaceutical products exclusively in Russia, Georgia, and a number of countries from within the Commonwealth of Independent States, which form part of Takeda’s Growth & Emerging Markets Business Unit. This divestment agreement was first announced in November 2019.
The divested portfolio includes OTC vitamins and food supplements, plus select products within the cardiovascular, diabetes, general medicine, and respiratory therapeutic areas, which are outside of the business areas Takeda has chosen as core to its global long-term growth.
As previously announced, Takeda and Stada have also entered into manufacturing and supply agreements under which Takeda will continue to manufacture and supply the products to Stada. In addition, approximately 450 employees supporting the divested assets have transitioned over to Stada.
The move is part of Takeda’s goal to divest $10 billion in non-core assets and focus on its five key business areas: oncology, rare diseases, neuroscience, gastroenterology, and plasma-derived therapeutics.
Deals with Hypera Pharma and Acino
Earlier this week (March 2, 2020), Takeda announced the sale of a portfolio of select non-core products exclusively in Latin America to Hypera Pharma, a Brazilian pharmaceutical company with a position in branded prescriptions, consumer health and branded generics, for $825 million and completed its sale of non-core assets in a number of Near East, Middle East and Africa countries to Acino for over $200 million.
The pending sale of products to Hypera Pharma includes OTC and prescription pharmaceutical products sold in Brazil, Mexico, Argentina, Colombia, Ecuador, Panama and Peru, which are part of Takeda’s Growth & Emerging Markets Business Unit. These non-core products generated revenues of approximately $215 million fiscal year 2018.
Takeda and Hypera Pharma have also entered into a manufacturing and supply agreement under which Takeda will continue to manufacture these products and supply them to Hypera Pharma. Additionally, Takeda anticipates that approximately 300 commercial employees supporting the divested assets will be given the opportunity to transition over to Hypera Pharma at the close of the transaction.
The transaction is expected to close in the second half of 2020, subject to the satisfaction of customary closing conditions. Until then, Takeda remains the owner of these products and responsible for ensuring patient access to them.
Also, Takeda completed its previously announced sale of a portfolio of select OTC and prescription pharmaceutical assets in a number of Near East, Middle East and Africa countries within its Growth and Emerging Markets Business Unit to Acino, a Basel, Switzerland-based pharmaceutical company, for a total value in excess of $200 million. The divestment agreement was first announced in October 2019.
The transaction includes approximately 30 select prescription pharmaceutical and OTC products. These products will continue to be made available by Takeda in other parts of the world. Close to 270 employees, primarily sales and marketing professionals supporting the portfolio, are also transitioning to Acino. The parties also entered into multi-year manufacturing and supply agreement, under which Takeda will continue to manufacture the products on behalf of Acino.
Earlier divestments and plans to reduce debt
These divestments follow other recent divestments by Takeda. In 2019, Takeda completed the divestiture to Novartis of Xiidra (lifitegrast ophthalmic solution), a prescription drug for treating dry eye, in a $5.3-billion deal ($3.4 billion upfront and up to $1.9 billion in potential milestones) and announced the sale of TachoSil, a fibrin sealant patch to control bleeding post-surgery, to Johnson & Johnson’s Ethicon for $400 million in May 2019.
Takeda says it intends to use proceeds from all of these recent divestitures to reduce debt and continue to deleverage toward its target of two times net debt/adjusted earnings before interest, tax, depreciation and amortization (EBITDA) within March 2022 to March 2024.