British pharma giant GlaxoSmith-Kline revealed late yesterday afternoon that it would not be going ahead with the sale of a portfolio of old drugs that had been valued at over $3bn (£1.9bn).
Chief executive Sir Andrew Witty had talked up interest in the selection of off-patent treatments last summer, with several private equity firms believed to be in the running.
However, it appears that Glaxo was not sufficiently impressed with any proposed deals. “The company has evaluated all bids received and has concluded, consistent with its key criteria of maximising shareholder value, not to pursue divestment of these products,” a spokesperson said.
Glaxo was being advised on the sale by Lazard, which also advised the drugs firm on its £9.5bn asset-swap deal with rival Novartis in April.
The decision to organise more than 50 of its older brands into the so-called “established products portfolio” was taken towards the end of last year. At the time the company said the portfolio would comprise £3.9bn of sales, around 16 per cent of revenues.
Witty said at the time that the move could allow the firm to “divest parts of that portfolio.” Sales from the portfolio are on the decline, however, largely due to competition from rival generic products.
Glaxo has been no stranger to large divestments in recent times. The Ribena and Lucozade drinks brands were put up for sale in April last year and fetched £1.35bn when sold to Japanese firm Suntory.
The company said six weeks ago that it is targeting £1bn in annual cost savings over the next three years.
Shares fell 1.9 per cent yesterday.