Reckitt puts for sale sign over drugs business

 
Kasmira Jefford
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SHARES in Reckitt Benckiser surged more than five per cent yesterday after the consumer giant effectively put its pharmaceuticals arm up for sale, in a deal that could raise more than £2bn.

The FTSE 100 group said yesterday it has launched a strategic review of its RBP unit, which is focused on the drug Suboxone, used to treat people with addictions to opioids such as heroine.

Sales of the drug took off in 2006 when the US passed legislation that allowed doctors to prescribe it more widely. However it lost its exclusive licence in the US in October 2009 and it has been losing market share to cheaper generic rivals.

Investec analyst Martin Deboo said the business could fetch anything from £2bn to more bullish estimates of £6bn.

“The big debate is what is the growth potential and how many years of profit are there left in the business,” Deboo told City A.M.

He added: “They have reached a point where they are ready to sell it they are hopeful that a big pharmaceuticals firm will see it as a nice niche business they would like to own.”

The sale of the legacy prescription business for around 20 per cent of profits will allow Reckitt to focus on its core consumer brands including Nurofen painkiller, Durex condoms and Finish dishwasher tablets.

The review was announced alongside the company’s third quarter results, which showed a five per cent increase in revenues to £2.5bn with like-for-like sales up three per cent.

RBP’s sales fell 14 per cent to £191m however Reckitt said the business had maintained a 68 per cent market share.