After a lengthy strategic review, Ipsen’s plan to hive off its consumer healthcare (CHC) business is gaining traction.
With the blessing of its board of directors, Ipsen entered exclusive talks with French pharmaceutical compatriot Mayoly Spindler to divest its global consumer health franchise, the company said Friday. Ipsen is in line to receive about €350 million ($398 million) for its CHC unit, which includes an earnout contingent payment of €50 million (roughly $57 million).
The deal is expected to close in the third quarter of 2022, Ipsen said. The sell-off is meant to produce a leaner company with a central focus on specialty care.
Under the deal, Ipsen and Mayoly Spindler would combine their respective CHC arms to create a “global consumer healthcare platform with a critical size and the capacity to support its growth,” Ipsen said in the release.
Ipsen tucked the CHC update into its full-year 2021 earnings report, which saw the French drugmaker generate roughly €2.87 ($3.26 billion) billion in sales for the year. That marks a roughly 12% increase over the €2.59 billion the company made in 2020.
Specialty care made up the bulk of Ipsen’s revenue, with 2021 sales of €2.64 billion (about $3 billion). Over that same period, Ipsen’s consumer health business generated €225.6 million (roughly $257 million).
“We will continue to grow our business in 2022 and beyond through our core and innovative brands as we manage the gradual erosion of Somatuline,” David Loew, chief executive officer at Ipsen, said in a statement, referring to company’s acromegaly blockbuster. The company also plans to foster “growth through external innovation,” the CEO said.
To that end, the company expects “cumulative remaining firepower of €3.5bn by 2024, including the divestment of the CHC business,” the company said in its release.
For 2022, Ipsen is banking on total sales growth above 2% at constant currencies, the company said. The company’s guidance factors in launches of additional generic competitors to Somatuline in Europe plus increased competition in the U.S.
Ipsen has also subtracted its consumer healthcare business from its broader 2020-2024 outlook. Over those four years, Ipsen expects total sales to hit a compound annual growth rate between 4% and 6%.
Ipsen unveiled the strategic review of its consumer healthcare business back in Dec. 2020. In September, Bloomberg reported that the company was working with the advisor Lazard on the project.
At the time, people with knowledge of the matter told Bloomberg that Ipsen’s CHC unit could be worth up to $500 million, or about $100 million more than the company is poised to get from its Mayoly Spindler pact.
Meanwhile, consumer health spinoffs are having a moment in the industry. Ipsen’s move follows similar initiatives by GlaxoSmithKline and Pfizer, Johnson & Johnson, Merck and Sanofi.