Lovaza is one of several of GSK’s drugs in its established products portfolio
GlaxoSmithKline (GSK) has reversed its decision to sell off several of its ‘established’ medicines after no suitable buyer was found.
The pharma company announced earlier this year its intent to divest certain US and European brands in its established products portfolio with an annual revenue value of £1bn.
However, GSK has now said it has “evaluated all bids received and has concluded, consistent with its key criteria of maximising shareholder value, not to pursue divestment of these products”.
The company had been keen to offload some its older drugs that make up one of the weakest performing parts of its business.
According to GSK’s most recent financial report sales in its established products portfolio fell by 14% for the first nine months of 2014 to £2.23bn.
The decline was primarily due to the onset of generic competition for the company’s fish oil drug Lovaza, which is approved to lower levels of triglycerides and reduce the risk of coronary artery disease.
Israeli company Teva was the first company to introduce generic Lovaza in April this year following the drug’s patent expiry, leading to a fall in Lovaza revenues for GSK of £185m.
Other products in GSK’s established portfolio with declining sales include antidepressant Seroxat/Paxil (paroxetine) and antiviral drug Valtrex (valacyclovir), both of which had a double digit fall in revenues for the first nine months of 2014.
Companies that had expressed an interest in buying GSK’s older products include US private equity firm Apollo. However, its £1.9bn offer was well below GSK’s expectations.
GSK has made several divestments in recent years as it attempts to streamline its business and focus on more profitable areas.
This includes the sale of several over-the-counter medicines to Belgian company Omega in 2012 and the sale of two anticoagulants to the Aspen Group in 2013.
The company also sold several iconic consumer brands, such as Ribena and Lucozade, to Japanese firm, Suntory Beverage & Food for £1.35bn, while more recently it was involved in an asset swap agreement with Novartis where GSK offloaded its cancer medicines and acquired several vaccines.