GSK sells Australian drugs to Aspen for $270 million
JOHANNESBURG/LONDON (Reuters) - GlaxoSmithKline (GSK.L) advanced its clear-out of non-core drugs on Wednesday with a deal to sell 25 older brands marketed in Australia to South Africa's Aspen Pharmacare (APNJ.J) for 172 million pounds ($270 million).
Andrew Witty, chief executive of Britain's biggest drugmaker, said last month during quarterly results that he was looking for further ways to simplify the GSK business, following previous divestments in consumer health.
The old Australian brands being bought by Aspen include herpes treatment Valtrex, epilepsy drug Lamictal and the antibiotic Amoxil. In total, the 25 products generated sales of around 83 million pounds in 2011 and 31 million in the first half of 2012.
Revenues for these products have gradually declined over recent years due to generic competition.
The sale to Aspen is expected to complete in the fourth quarter, subject to regulatory approvals from Australian authorities, and GSK said net cash proceeds would be some 155 million pounds.
Aspen said in a statement that the purchase price for the 25 pharmaceutical products was subject to a small reduction should the deal not be completed by October 31. It will fund the purchase from new offshore debt facilities.
The Australian deal follows three earlier sell-offs by GSK within its non-prescription division, where the company set itself a goal more than a year ago to divest non-core brands representing about 10 percent of its consumer health portfolio.
GSK sold brands marketed in North America to Prestige Brands Holdings (PBH.N) for 426 million pounds in December, while Belgium's Omega Pharma bought European ones for 470 million euros in March and Aspen acquired certain international lines for $263 million in April.
The British group has failed, however, to sell its non-prescription weight-loss drug Alli, which has been hit by production problems and disappointing sales. GSK said last month that it had now given up on plans to dispose of Alli.
"As with the divestment of its non-core over-the-counter (OTC) brands earlier in 2012, today's announcement is an example of GSK's commitment to realize value and enhance returns to shareholders through the sale of low growth or non-core businesses and to focus on priority brands, products and pipeline opportunities that have long term growth potential," the company said.
($1 = 0.6375 British pounds)
(Reporting by Olivia Kumwenda and Ben Hirschler; Editing by David Cowell)