SPECIALITY PHARMACEUTICAL company Warner Chilcott said yesterday it would explore strategic options, including preliminary talks with potential buyers, sending its shares up as much as 24 per cent.
The Irish company, which makes women’s healthcare and dermatology products and other speciality drugs, said it hired Goldman Sachs as its financial adviser. The announcement comes after speculation that Bayer would make a bid for the drugmaker at $32 per share.
Warner Chilcott declined to comment on the Bayer rumour.Some analysts suggested that other options, such as selling certain assets or declaring a special dividend, were as likely as a sale of the company. Warner picked up potentially attractive products with its 2009 purchase of Procter Gamble’s pharmaceuticals business, including the osteoporosis drug Actonel and the ulcerative colitis drug Asacol.
The German drugs and plastics maker Bayer was last week rumoured to be close to making a multibillion-euro acquisition to strengthen its healthcare division.
“I don’t know about Bayer as a buyer. This doesn’t seem to me that that gets them anything they’d need,” said Jefferies Co analyst Corey Davis. “I’ve always seen Warner as more of acquirer than acquiree given their declining revenue stream, but bigger companies are loaded with cash and there’s tons of MA going on.”
In January, Warner Chilcott forecast a weak 2012 on lower sales and loss of market exclusivity for Actonel in western Europe. Warner Chilcott’s acne drug Doryx also faces generic threat.
Morningstar analyst David Krempa also said he would be surprised if Bayer were interested in Warner Chilcott and suggested that it may be looking to sell off Actonel rather than the entire company. Actonel had sales of $180 million in the fourth quarter of 2011, a 23 per cent decline.
“Their product portfolio has a lot of patent issues coming up, which will kind of limit the amount of people that are interested in buying the whole company,” Krempa said. The company said it would not discuss further developments until the board has approved a course of action or deems further disclosure to be appropriate. – (Reuters)
