(Adds performance details, analyst comments)
LONDON, July 28 Reckitt Benckiser plans
to spin off its heroin-addiction treatment in the next 12 months
as sales slide under pressure from rival copycat versions of the
Sales of Suboxone have slumped and Reckitt has two new
pharmaceutical projects that could diversify revenue and boost
the unit's market valuation.
The British company put Suboxone under strategic review in
October and in April said it was leaning towards spinning off
the business rather than a private sale.
Analysts had given a range of valuations for the business
due to uncertainty over the longer-term impact of competition
from generic versions of Suboxone. Deutsche Bank values it at
2.9 billion pounds ($4.92 billion) including debt. Prior
estimates from other analysts have ranged from 2 billion to 5.5
"A trade buyer looks to have remained elusive, with a
stockmarket listing the natural, if potentially more fraught,
alternative," said Hargreaves Lansdown analyst Keith Bowman.
Reckitt did not entirely rule out an outright sale if a
buyer emerges. It has not decided whether to keep a stake in
Suboxone if it opts for a spin-off.
Reckitt, which also makes Durex condoms, Finish detergent
and Nurofen painkiller, reported a 4 percent rise in first-half
sales on a constant-currency basis, excluding Suboxone, whose
sales fell 8 percent.
The growth was in line with many analysts' expectations.
Reckitt stood by a 2014 target for revenue growth of 4-5
percent this year. It said it expected more profit margin
growth, which implies an increase on a prior target for the
margin to be flat to marginally higher.
Recent efforts to reduce costs have targeted the company's
advertising budget, among other areas.
Reckitt shares were up 2.6 percent at 0821 GMT.
Bernstein analysts have said that Suboxone - which is sold
as a film that dissolves in the mouth - has 79 percent of the
large U.S. market, down from about 85 percent since generics
went on sale in March last year.
($1 = 0.5890 British Pounds)
(Reporting by Martinne Geller in London; editing by Tom