Bayer to sell diabetes device biz for as much as $2.5B Bayer hopes to sell its ailing diabetes device unit to help bolster growth and fund a potential acquisition of Zoetis ($ZTS), Bloomberg reports. The conglomerate would like to focus more closely on medicines, which has been a faster growth area than devices. In September, Bayer sold its interventional device business for $415 million to Boston Scientific ($BSX). If it were also to sell its diabetes care business, the only remaining substantial medical device-related segment would be radiology. Bayer has remained mum on the Essure contraceptive device that it gained in a $1.1 billion acquisition of Conceptus last year; the intrauterine device has been subject to a series of lawsuits. Its current Medical Care business is comprised of diabetes care and diagnostic imaging. Last quarter, Medical Care declined by 4% and the company attributed the drag on growth to diabetes care, noting that it continues to be hampered by reimbursement pressure and price declines in the U.S. and lower demands in Europe. The core product for the diabetes unit is blood glucose meter Contour. Sales for it declined by 10% on a currency adjusted basis during the first nine months to €478 million ($594 million) from €543 million ($674 million) during the same period in 2013. Due to these declines, it was Bayers worst performing product during the period. It probably would be better to concentrate on their growth business, which is the pharma pipeline and the animal-health business, Ulle Woerner, an analyst at Landesbank Baden-Wuerttemberg, told Bloomberg. Its going to be hard to sell it at a good price. Bayer is reportedly working with Credit Suisse to achieve a sale of the diabetes device business. Bloomberg speculates that private equity firms, which like to swoop in and tinker with businesses with cash flow often to reinvigorate them and siphon off cash, could be in the bidding for the Bayer unit which could go for €1 billion ($1.24 billion) to €2 billion ($2.5 billion). In October, it also completed an acquisition of Mercks ($MRK) over-the-counter drug business for $14.2 billion. The company reportedly isnt in a hurry to buy animal health player Zoetis with its $22 billion market cap; but hopes first to sell its diabetes business as well as complete a planned spinoff and public listing for its plastics unit.
Posted on: Thu, 27 Nov 2014 09:09:33 +0000
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