* Omega Pharma paying 470 mln euros for European products
* GSK to return 310 mln pounds net proceeds to shareholders
* Alli on hold, need to resolve Roche supply interruption
By Ben Hirschler
LONDON, March 15 - GlaxoSmithKline has agreed
to sell several over-the-counter healthcare brands in Europe to
Belgium's Omega Pharma for 470 million euros ($612 million),
while delaying the divestment of its weight-loss pill Alli.
The decision to put the sale of Alli on hold follows an
interruption in supplies from Roche, which makes the
active ingredient for the product, a company spokeswoman said.
Net cash proceeds from the sale to Omega are expected to be
approximately 310 million pounds ($486 million), which will be
returned to shareholders during 2012, GSK said on Thursday.
Reuters had earlier reported that Omega was among those
seeking to buy the European products, which include painkiller
Solpadeine, Zantac for stomach acid, hayfever spray Beconase,
and vitamin and feminine hygiene lines with combined sales of
185 million pounds in 2011.
As part of the agreement, Omega will acquire the Herrenberg
manufacturing site in Germany, which employs 110 people.
GSK sold a range Of non-prescription products in North
America to Prestige Brands Holdings for 426 million
pounds in December, after failing in its initial plan to find a
single global buyer.
GSK first announced in February 2011 that it planned to
dispose of non-core brands sold primarily in North America and
Europe and representing about 10 percent of its consumer health
portfolio, in order to focus on priority brands and emerging
WORKING WITH ROCHE
Alli, an over-the-counter (OTC) weight-loss drug that has
been the subject of health concerns, was the biggest single
product in the portfolio, with global sales in 2011 of 93
It was once touted as major seller by GSK but is no longer
seen as a central driver for the consumer health operation.
Although GSK still plans to sell Alli, it said the process
had been delayed pending the resolution of a temporary supply
interruption with Roche. The Swiss company manufactures the
active ingredient, orlistat, which is also the active substance
in Roche's prescription-only drug Xenical.
Alli is a low-dose version of Xenical.
The spokeswoman said GSK was working with Roche to rectify
the problem as soon as possible, adding it was a
production-related issue and had nothing to do with safety.
There have been concerns about potentially serious health
problems connected with orlistat, although the European
Medicines Agency concluded last month that its benefits for
obese patients outweighed the risk of very rare liver-related
side effects and kidney issues.
GSK said it also remained in discussions about divesting
non-core OTC brands in markets outside of Europe and North
America with combined sales of around 60 million pounds.
Omega, which delisted its shares last month, said it would
gain critical mass in Germany, Britain, Poland and Italy by
buying the GSK brands.
The company is a stand-alone OTC medicines company, ranking
just outside the top 10 in that market and competing with the
OTC arms of pharma giants such as Johnson & Johnson and
GSK, as well as those of consumer product groups like Procter &
Gamble and Reckitt Benckiser.