Bayer Acquires Merck's Consumer Care Business
Earlier this week, Bayer announced that it would be acquiring Merck’s consumer care business for the price of $14.2 billion. In 2013, Merck generated 70 percent of its sales in the United States via its consumer care business. The deal will make Bayer the OTCs industry leader in North America and Latin America. Bayer also believes that the deal will give it a strategic advantage for global growth in the OTC market. Bayer will gain the sinus and flu, cold and allergy, dermatology, foot health and gastrointestinal drug products sold by Merck. Major brands included in the deal include Claritin, Afrin, and Dr. Scholl’s.
Bayer and Merck will also enter into a global co-development and co-commercialization agreement for the soluble guanylate cyclase (sGC) field. There is a current need for cardiovascular disease treatments, and novel modulators of the sGC pathway could hold the key to addressing this need. However, there must be increased focus on development and clinical programs in order to explore the potential of these novel compounds. This collaboration will include the Adempas (Riociguat) drug, which has already been approved as treatment for certain classifications of pulmonary hypertension. Vericiguat, an investigational compound being develppped in two Phase IIb studies, as well as other sGC modulators in earlier research and development stages can also be included in this collaboration.
Merck’s CEO, Kenneth Fraziers, says, “We are now joining forces in the area of sGC modulation to implement a joint development and commercialization collaboration that allows both companies to better explore the medical potential of the novel sGC modulators.”
The deal is pending approval from antitrust regulators, which could come as soon as the 2nd half of 2014. In this deal, Merck will pay Bayer $1 billion along with future milestone payments for meeting sales targets. The two companies will share costs and profits from the sGC modulators field.
Olivier Brandicourt, CEO of Bayer Healthcare, commented on the deal in a press release. He noted that the transaction would make Bayer more competitive in markets abroad. “The strong Bayer brand will help to further leverage the already successful product brands worldwide. We expect particularly strong growth in key countries outside the U.S. where our superior commercial presence will drive sales of the combined business.”
Upon completion of the acquisition, Bayer is expected to achieve global leadership positions in dermatology and gastrointestinals, two of the five most important non-prescription health care product categories, and advance to the number two position in the cold, allergy, sinus and flu category,” said Brandicourt.