Reckitt to quit drugs with sale of heroin treatment
Reckitt Benckiser’s chief executive, Rakesh Kapoor, yesterday hung a “for sale” sign above the Cillit Bang and Dettol maker’s treatment for heroin addiction, with analysts predicting a potential £2bn to £5bn price tag.
The Suboxone heroin-replacement product, the sole component of the consumer goods group’s pharmaceuticals business, has for decades been the treatment of choice for US doctors trying to wean addicts off the killer drug.
But its patent has now expired and cheap generic copycats are eating into the market. Now Mr Kapoor has launched a review of the business that is likely to lead to it being sold. Reckitt will maintain its ownership of consumer medicines like Nurofen and Gaviscon.
Analysts said there would be no shortage of bidders in the global pharmaceuticals industry with the expertise to manage medicines that have come off patent. Reckitt has tried to deal with the issue by creating a new format for the medicine: an impregnated film that users put under their tongue. It claims this is safer than the previous tablet version as some addicts have been dissolving the tablets and injecting them. However, generic tablets remain popular among price-conscious US healthcare providers and the company’s share of the market has fallen to 68 per cent.
Reckitt advisers seeking bidders will promote the idea of looking for growth outside the US, where Suboxone has not made many inroads, although the company admits it continued to expect long-term erosion of market share. Shares in Reckitt leapt 5 per cent on the news, gaining 234p to 4,734p.
“Rakesh has always been clear: the focus [of the company] will be on where the positive rather than the negative news is,” Chris Wickham, an analyst at Oriel Securities, said.
Reckitt would not comment on whether the proceeds of a sale would be returned to shareholders or invested in more acquisitions.
The share price gain was also due to the company issuing a strong update on trading in the past quarter, shrugging off concerns among rival consumer goods groups, such as Unilever, about slowing growth in emerging markets.
Stripping out new product launches, revenues are growing at 5 per cent, thanks to Reckitt’s focus on health and hygiene products in those regions.
With the exception of southern Europe, all European regions are now growing, with Scholl footcare faring particularly well and only partly offset by poor sales of Air Wick air fresheners amid stiff competition.
- 1 Jennifer Lawrence scores first UK top 40 single with Hunger Games track 'The Hanging Tree'
- 2 Shia LaBeouf claims he was raped during #IAMSORRY art installation performance
- 3 'You should come to my house and eat cheeses with me': 4-year-old sends adorable love letter to girl at school
- 4 Scientists predict green energy revolution after incredible new graphene discoveries
- 5 Michael Buerk wishes he killed Jimmy Savile when he had the chance - by pushing him overboard a cruise ship
Kim Jong-un 'in dire need of allies' within his own government as younger sister appointed to senior role
Black Friday UK: The shops hit by chaos and violence as shopping frenzy sweeps country
Scientists predict green energy revolution after incredible new graphene discoveries
Russell Brand: 'Katy Perry? I don’t know who that is'
Michael Buerk wishes he killed Jimmy Savile when he had the chance - by pushing him overboard a cruise ship
Obama: The only people with the right to object to immigration are Native Americans
Ukip says babies born to immigrants in the UK should be classed as migrants – which would include Nigel Farage’s own children
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
Ukip mocked after mistaking Westminster Cathedral – for a mosque
Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
David Cameron sets out immigration reforms: We should distrust Ukip and their 'snake-oil of simple solutions'
iJobs Money & Business
Excellent Package: Austen Lloyd: EAST ANGLIA - SENIOR SOLICITOR LEVEL ROLE** -...
£Attractive Package: Citifocus Ltd: Prestigious asset management house seeks a...
£Negotiable: Citifocus Ltd: This is a varied role focusing on the firm's mutua...
£90000 - £140000 per annum + benefits: h2 Recruit Ltd: Are you a high achievin...