UK-headquartered Reckitt Benckiser is considering the future of its pharmaceuticals business, and may decide to spin it out as an independent, publicly-listed company.
The group makes more than 90 per cent of its net revenues from consumer health products and household goods, and the pharma unit is increasingly seen as a legacy division that is out of kilter with the rest of Reckitt, particularly in the wake of its acquisition of Schiff Nutrition for $1.4bn in 2012.
Chief executive Rakesh Kapoor gave little away on the firm’s first-quarter conference call, but did say that the company plans to “take a look at our portfolio and think about which pieces of that portfolio perhaps need a solution which is different from being in the company.”
Reckitt’s main pharmaceutical product is Suboxone (buprenorphine and naloxone) for the treatment of opioid dependence, which has been under pressure thanks to an increasingly competitive market space, and revenues for the pharma division slipped 11 per cent to £170m ($286m) in the first three months of this year.
One reason for the decline is that Reckitt withdrew a tablet formulation of Suboxone in the US – partially because of concerns it posed a risk of accidental ingestion by children and following the launch of generic competition – and has focused instead on an under-the-tongue film strip formulation.
Meanwhile, the film version has been under some pressure on pricing and has lost market share as some patients switch to cheaper generics, although the brand is still holding fairly firm at 64 per cent of the US sector down from 68 per cent a year earlier, according to Reckitt.
Reckitt filed a Citizen’s Petition with the US FDA last year to try to force generic tablet versions of Suboxone off the market on safety grounds, although critics have dismissed this as a defensive ploy and say greater use of child-resistant blister packs in the US market would be a more sensible way forward.
The company has said it will give a fuller picture of the pharmaceutical unit’s future at its interim results later this year.