As part of its massive restructuring – to stay alive – Merck may sell off its consumer-products business, which includes brands like Coppertone and Claritin.
Analysts project the same could yield $10 million for the pharma giant, whose market value exceeds $160 billion.
The full story here:
Reuters is reporting that Merck “is considering selling a big portfolio of mature drugs that could fetch more than $15 billion… [the company] is working with an investment bank on the potential sale of the off-patent drugs, which could draw interest from generic drugmakers.”
The full story here:
reuters.com/article/2014/04/ … 0M20140430
The key here will be whether or not finasteride is rolled into the selloff. If not, that tells us that the potential liabilities of the drug are too great for a buyer to take on, even at a fire sale.
On the other hand, if Merck COULD dump Propecia – particularly in an Eastern market – they could reduce their own liabilities going forward, as least from a PR point of view.
In other words, when scientific studies prove that finasteride causes PFS, Merck could simply say:
“Well, when we owned it, we didn’t know–a causal relationship between the use of Proepcia and continued sexual dysfunction after discontinuation of treatment had not been established at the time.”
Then they just settle with the current 1,500 or so litigants (as cheaply as possible, of course) and wash their hands of the whole matter.
The problem is…
We’s wize to ya, KCF.
And there it is–the Reuters follow-up confirming what I said last week:
“Merck drugs likely to be sold include blood pressure treatments Cozaar and Hyzaar, with combined sales of $1 billion last year; cholesterol fighter Zocor, with sales of $301 million, and hair growth drug Propecia, with sales of $283 million.”
The problem I see is this: who would take on such a huge potential liability? I mean, it’s not impossible that the FDA could at some point recall the drug. So who’d want to be left holding that bag?
But KCF is a gambler at heart, so he’s probably trying to get the deal done before more widespread global outrage erupts. And even if they have to sell it for zero times net sales – say, $100 million – they’ll probably do it just to wipe their hands of Vioxx Part II.
The full story here:
As we have already seen the money they will have to pay out in compensation will likely be minuscule compared to what they will make in profits.
I wonder does deal mean that merck can no longer be sued now over propecia ?
No, there would be no way for Merck to extract themselves from current legal liabilities. But if they CAN sell Propecia, I imagine they would only do so if the buyer takes on all future claims.
That’s why I think they’re going to dump it in a fire sale – that is, for as cheaply as possible just to wash their hands of the whole thing going forward.
If they CAN manage to pull that off, then when clinical research shows there IS a “causal relationship” between the drug and PFS, they can simply say, “Oh, that’s so sad. We’re sorry to hear about all the PFS victims. But at that time WE owned the drug, there was no scientific evidence that it caused long-term side effects of any kind.”
A really neat move would be if they could use the cash they get from the sale to buy off all the current lawsuits, so the whole thing’s a wash.
That’s much better than having to face a Forbes magazine headline that warns of a global PFS epidemic–and see your stock lose 50% of it’s value in a day.
Merck’s consumer business just went to Bayer for $14 billion, or about $8.5 billion after taxes:
reuters.com/article/2014/05/ … BL20140506
Next’s let’s see if they can unload Propecia–and to whom.
And now…
Merck also sold some of its ophthalmology assets to Japan’s Santen Pharmaceutical for $600 million.
The full story here:
online.wsj.com/news/articles/SB1 … 94108.html
Sounds like Merck is gearing up to save itself from imploding.
The latest on Merck’s attempt to jettison its perilous hair-loss drug, Propecia:
online.wsj.com/articles/merck-sa … 1401831312
I imagine they’d be thrilled to rid themselves of the albatross.
But, again, who in the world would acquire a product that’s dripping with liabilities?