Reckitt hints at spinning off its drugs business

 
Kasmira Jefford
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RECKITT Benckiser signalled yesterday that it is leaning towards a spin-off of its troubled pharmaceuticals arm as it posted a better-than-expected rise in fourth quarter sales.

The consumer goods group behind Durex condoms and Dettol cleaning products last year 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 heroin.

Sales of the drug have been in decline since it lost its exclusive licence in the US in 2009. The group said yesterday that a “capital markets solution” was emerging as a “strong option” for the business.

“We mean that RBP would be an independent, publicly listed company,” said chief financial officer Adrian Hennah.

Reckitt is aiming to expand its consumer health business, which already includes products such as Nurofen tablets, and in October last year chief executive Rakesh Kapoor forecast a wave of mergers and acquisitions in the sector as pharmaceutical firms look to realise value from their portfolios.

Reports emerged last week that Reckitt was in talks to buy Merck’s consumer healthcare business, however it did not comment on the deal.

Reckitt posted a four per cent rise in first-quarter like-for-like sales on a constant currency basis, better than the 3.7 per cent rise forecast by analysts.

Sales in the health business rose 11 per cent thanks to new product launches while hygiene and home grew by two and one per cent respectively.