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Skin care firm Stiefel considers $4bn sale

By Gareth Macdonald , 23-Mar-2009

 

Dermatology drug specialist Stiefel Laboratories may be looking for a Big Pharma buyer according to various media reports.

 

An article in the Wall Street Journal late last week said that the Florida, US firm is looking for around $4bn (€3bn) and has already attracted interest from drug majors GlaxoSmithKline (GSK), Novartis and healthcare giant Johnson & Johnson (J&J).

 

While Stiefel is still majority owned by the family that founded the firm, equity investment specialists the Blackstone Group hold a significant minority stake having invested $500m in 2007.

 

Stiefel declined to comment on the sale speculation but a spokeswoman told the newspaper that: "Like any business, if we received an offer it would be carefully considered."

 

Similarly, while none of the potential suitors has commented, a Big Pharma buyout would fit with the M&A strategy sweeping the sector and would boost the skin care offerings of any drug majors seeking to broaden product pipelines ahead of blockbuster patent expiry.

 

Coral Gables, Florida based Stiefel, which generated revenue of $906m in 2007, employs around 3,000 people worldwide and has facilities in Singapore, Brazil, Mexico and Pakistan, which are likely to be important markets for Big Pharma going forward.

 

The prescription acne cream Duac, one of Stiefel’s best sellers, would a good fit for both Novartis and GSK which sell the anti-itch treatment Desenex and the Abreva cold sore medicine, respectively.

 

A GSK move would also fit with recent comments by CEO Andrew Witty that the UK group is keen to expand its non-prescription business to diversify its revenue streams.

 

However, a J&J acquisition may make even more strategic sense, given that the firm already shares the rights to acne and psoriasis treatments made by Stiefel.

 

Miller Tabak & Co analyst Les Funtleyder told Reuters that: “J&J makes the most sense to acquire Stiefel because this deal would bolster J&J in dermatology,” adding that J&J, through its partnerships with Stiefel, would also have the best ability to value an acquisition.

 

 

 

 

 

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