GSK Sells 15 Consumer Health Brands to Stada to Fund Spin-off of Consumer Healthcare Business

By Ke Ke

GSK Raises Funds by Selling 15 Well-Known Consumer Healthcare Brands Across Multiple Therapeutic Areas in Over 40 Countries, While Buyer Stada Strengthens Its Market Leadership Through the Deal.

On February 24, German generic drug manufacturer Stada announced the acquisition from GlaxoSmithKline (GSK) of 15 local and regional consumer health brands primarily sold in European countries, including the antiplatelet prescription drug Venoruton, the cold remedy Coldrex, the vitamin C supplement Cetebe, the sore throat relief product Mebucaine, and the antiallergic prescription drug Tavegyl. These five brands accounted for more than half of the total turnover of the acquired portfolio.

Stada declined to disclose financial details of the acquisition or the 2019 sales figures for the product portfolio, but according to a person familiar with the matter, the deal is valued at least at €300 million (approximately $325 million). The transaction is expected to be completed in the second quarter of this year.

From a geographical perspective, the sales of the product portfolio acquired by Stada are widely distributed, with Germany, Russia, Poland, and Spain each accounting for one-tenth. France, Hungary, Italy, Portugal, Serbia, and Switzerland are among the top ten countries in terms of sales revenue from the product portfolio.

“The acquired brands and their geographic distribution align well with Stada’s core target markets and activities. This acquisition further solidifies Stada’s position as a truly pan-European consumer healthcare company,” commented Peter Goldschmidt, CEO of Stada, on the acquisition.

On the one hand, Stada aims to expand its global OTC business through the acquisition of existing brands; on the other hand, GSK seeks to divest certain non-core OTC products to help fund the costs associated with the spin-off of its consumer healthcare business.

In June 2019, GSK disclosed its intention to raise capital by divesting non-core pharmaceutical assets, planning to sell the marketing rights for its products in Latin America and its Physiogel skincare brand, aiming to raise approximately $1.3 billion. In October of the same year, it sold the rabies vaccine Rabipur and the tick-borne encephalitis vaccine Encepur for approximately $1.1 billion. In early February this year, GSK formally announced the spin-off of its consumer healthcare joint venture with Pfizer into an independent entity. Following the separation, GSK will focus on innovative medicines and vaccines. GSK estimates that this plan will cost £2.4 billion (approximately $3.1 billion), including around £1.6 billion in cash, with the company intending to cover approximately £1 billion through product divestitures.

Stada focuses on generic drugs, with its current product portfolio built on two strategic pillars: specialty pharmaceuticals and over-the-counter (OTC) consumer healthcare products. In 2018, Stada’s total annual sales amounted to €2.33 billion, while sales in the first half of 2019 rose by 11% year-on-year to reach €1.26 billion. A company statement noted that Stada achieved substantial market share gains and robust sales growth in key European markets. To date, the company has concentrated its operations outside the United States, as the U.S. generics sector has faced significant price pressure in recent years.

It is understood that Stada was once among the acquisition targets for Upsa, the French consumer healthcare division of BMS. However, Upsa ultimately acquired Taisho Pharmaceutical for $1.6 billion. After being taken private by Bain Capital and Cinven Partners in 2017, Stada began actively expanding its product portfolio. It secured distribution rights in Europe, the Middle East, and Africa for Nizoral, an anti-dandruff shampoo brand formerly owned by Johnson & Johnson, and acquired controlling stakes in the Vietnamese companies Pymepharco and BIOCEUTICALS in 2018. In June 2019, Stada acquired from GSK five OTC skincare brands (Ceridal, Eurax, Oilatum, Polytar, and Savlon) as well as the sales rights for the pediatric cough medicine Tixylix in the European market and specific markets in the Asia-Pacific region and Latin America. In November 2019, Stada further purchased from Takeda Pharmaceutical the sales rights for approximately 20 OTC and prescription drugs in Russia, Georgia (U.S.), and several other Commonwealth countries for $660 million, marking the largest publicly disclosed acquisition in Stada’s history.

Reference Source: Stada Aids GSK's Consumer Health Spinoff Plan with Deal for 15 Products