Reckitt Benckiser reviews pharma unit, could sell it
Consumer goods group Reckitt Benckiser is reviewing options for its pharmaceuticals unit, it said on Tuesday, effectively putting up for sale its prescription medicine for heroin addiction, which faces cheap, copycat competition.
Shares in the British company rose over 4.5 percent in early trading. Bank of America Merrill Lynch has valued the pharmaceuticals unit at about 2 billion pounds ($3.2 billion).
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The business centres around the drug Suboxone, which Reckitt sells as a film that dissolves in the mouth. It is used to treat addiction to opioids like heroin. In the third quarter, its revenue fell 14 percent to 191 million pounds.
The company, which also sells cleaning products and over-the-counter medicines, had said before that the right time to consider options for the pharmaceutical business would be following the launch of cheap, generic Suboxone tablets.
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In February, U.S. regulators approved two generic versions of the drug.
It expects the review to take sometime, and said it would update shareholders during the course of 2014.
Reckitt also reported a 5 percent rise in third-quarter revenue, which brought year-to-date revenue above analysts' estimates.
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For the first nine months of the year, total revenue, excluding the pharmaceuticals business, was 6.95 billion pounds. Analysts on average were expecting 6.93 billion pounds, according to a company-provided consensus.
Reckitt cited strength in emerging markets.
Looking ahead, the company nudged up its target for full-year net revenue growth, excluding the pharmaceuticals business and including the impact of acquisitions and divestments.
It now expects a rise of at least 6 percent, whereas it earlier forecast growth at the high end of the 5 to 6 percent range. The company cited strength of its recent acquisitions for the increase.