Lupin, US firms weigh bids for GSK's mature drugs

Generics firm Lupin, some US drugmakers looking for a tax-saving deal in Europe and private equity funds are planning to bid for a range of older drugs being auctioned by GlaxoSmithKline, five sources familiar with the matter said.

GSK is looking to divest the mature products in a bid to improve its growth profile and wants to dispose of off-patent drugs marketed in North America and western Europe with annual sales of around 1 billion pounds. Assuming a multiple of between two and three times those sales, the assets on the block could fetch between $3.5 billion and $5.0 billion, the sources said.

Chief Executive Andrew Witty said in April that GSK was reviewing its portfolio of mature drugs and in May the group invited sector players and private equity firms to consider bidding.

Non-binding offers are expected before the end of the month, according to several sources who asked not to be named because the talks are private. GSK brands up for sale include antidepressant Paxil, migraine treatment Imitrex, Zantac for stomach acid and Zofran for nausea.

Officials at GSK, which is being advised on the auction by Lazard, declined to comment. Britain’s largest drugmaker will report second-quarter results on Wednesday. One person with direct knowledge of the matter said on Tuesday Lupin was seriously looking at the GSK assets and was in talks with the British drugmaker.

Lupin Chief Executive Vinita Gupta has said for some months the company wanted to enhance its branded generics business in the United States and a company official confirmed it was looking for deals, while declining comment on specific targets.