Apollo Global Manangement joins bidding wars for GSK's mature drugs
- Leon Black's private equity firm, Apollo, is joining the auction to bid on GSK's mature drugs—a portfolio worth roughly $3 billion. Other bidders include KKR, Lundbeck, Norgin and maybe, the Indian drug manufacturer, Lupine.
- Drugs up for sale include Paxil for depression, Imitrex for migraines, Zantac for stomach acid, and Zofran for nausea.
- Combined estimated revenues are declining, but still about $1 billion per year.
As the largest pharma company in the UK, GSK is looking ahead towards the future, as are most of its peers. However, there is still value in the older segments of its portfolio, even as genericization erodes profits. Bidders, including Glaxo, know this and are ready to bid for the right to own these drugs. Since GSK is not selling the factories, if the drugs are acquired by a private equity firm, manufacturing and distribution will need to be outsourced. The good news: there is still value in GSK's mature portfolio.