Dive Brief:
- The suitors are lining up: Mylan and Lupin are among a number of pharmaceutical companies evaluating bids for Bayer AG’s dermatology business as the German company looks to trim down before closing its $66 billion acquisition of Monsanto Co., Bloomberg reports.
- Nothing is finalized yet, but initial bids could soon be forthcoming. Bayer's dermatology business, which is headlined by Desonate (desonide) for eczema and Finacea (azelaic acid) for rosacea, could command a price as high as $1 billion, Bloomberg said.
- Bayer announced earlier this month it would acquire Monsanto for $128 per share, closing a drawn-out pursuit of the seed company. The companies expect the deal to close by the end of 2017.
Dive Insight:
Bayer wants to raise cash in a big way by exploring ways to sell its assets as it moves forward with plans to buy Monsanto in an all-cash deal that would combine Bayer's crop chemical treatment business with Monsanto’s seed business.
By shopping its dermatology unit, Bayer could tap into industry interest in a growing market. Skin treatment technologies hit a market value of $171 billion in 2015, and could reach as high as $20.4 billion in 2020, according to a study earlier this year by BCC Research.
Mylan and Lupin, two suitors mentioned by Bloomberg, have both recently expanded their dermatology portfolio.
In May, Mylan announced an agreement to buy Renaissance Acquisition Holdings, a non-sterile, topicals-focused specialty business for $950 million in cash. CEO Heather Bresch, now embroiled in the controversy over EpiPen pricing, noted at the time that the “dermatology/topicals space has long been an area of focus" for Mylan.
Mumbai, India-based Lupin recently bought Gavis Pharmaceuticals and its Novel Laboratories in a $880 million cash deal, building out its generic portfolio in the U.S. and broadening its pipeline in dermatology.
A wide range of other companies, including Leo Pharma, Cadila Healthcare, Torrent Pharmaceuticals, Nestle’s Galderma, Almirall, Sun Pharma, Teva , Allergan, Perrigo, venture capitalists KKR & Co and Bain Capital have also indicated an interest in a potential sale, the Bloomberg report said.