Celltrion to divest prescription drugs acquired from Takeda

To sell business rights, excluding domestic business rights, for 210 billion won to Singapore-based CBC Group.

“OTC drugs business rights’ will be sold separately…”in finalizing negotiations with another company”

In 2020, Celltrion acquired the primary care business rights of Takeda Pharmaceutical for 310 billion won.

(Credit: Celltrion)

The Celltrion group is selling divestiture of primary care business rights in the Asia-Pacific region acquired from Takeda Pharmaceutical in 2020.

 

Among the business rights acquired from the previous deal, Celltrion group will initiate the sales of business rights for prescription drugs, excluding those intended for the domestic market.

 

They will also engage in separate negotiations with a different company for the business rights related to the over-the-counter (OTC) drugs.

 

Celltrion group announced on the 2nd that the company will sign a contract to divest the primary care business rights in the Asia-Pacific region, which it acquired from Takeda Pharmaceutical.

 

In 2020, Celltrion acquired the primary care business rights of Takeda Pharmaceutical for US$278.3 million (approximately 310 billion won).

 

This acquisition included prescription drugs such as the DPP-4 inhibitor class diabetes medicine ‘Nesina (alogliptin)’ series, TZD class diabetes medicine ‘Actos (pioglitazone)’ series, and ARB class of hypertension treatment ‘Edarbi (azilsartan)’ series, as well as OTC drugs such as cold medicine ‘Whituben’ and stomatitis medicine ‘Albothyl’.

 

The current divestiture encompasses the business rights for prescription drugs like Nesina and Actos in the Asia-Pacific region.

 

The business rights of OTC drugs and domestic prescription drugs are excluded from the divestment.

 

Major items that Celltrion acquired from Takeda Pharmaceutical in 2020.

 

(Clockwise from the upper left) Product photos of Nesina, Actos, Edarbi, Albothyl, Whituben, and Nesinamet.

The acquisition target is CBC Group, a Singapore-based global healthcare-focused private equity firm.

 

CBC Group has established an overseas special purpose company (SPC) called 'HP Bidco 2 Limited' to proceed with the acquisition.

 

The future business rights transfer agreement will be signed between Celltrion APAC and HP Bidco 2 Limited.

 

The sales price is 5.58 billion Thai Baht (THB, approximately 210 billion won).

 

Celltrion explained that the sale price for the business rights was determined based on a 3-year post-acquisition evaluation, considering increased business value resulting from revenue growth for related items (with an average regional sales growth rate of 13%) and cost savings through production internalization after the acquisition.

 

The value of the business rights for prescription drugs in current sales represent approximately half of their value compared to when Celltrion acquired them in 2020.

 

Celltrion explained that if the value of the items were recalculated based on 2020, it would amount to approximately 138 billion won, equivalent to 46% of the total value at that time.

 

Celltrion will retain the business rights for domestic prescription drugs that were excluded from this sale.

 

The company expects to maintain sales revenue from products like Nesina and Edarbi in the domestic market as before.

 

Additionally, Celltrion plans to use these products as a foundation for developing incrementally modified drugs.

 

At the same time, Celltrion has secured exclusive supply rights for Edarbi and Nesina series within the Asia-Pacific region.

 

Celltrion Pharm will produce Edarbi and Nesina for supply to the CBC Group, which will then distribute these products in the Asia-Pacific region.

 

This arrangement is anticipated to provide Celltrion Pharm with a stable source of revenue through the exclusive supply of the Edarbi and Nesina series.

 

Celltrion is currently in negotiations with another company regarding the sale of the entire OTC drugs business rights for the rest of the Asia-Pacific region, including Korea.

 

Celltrion has stated that it is in the final stages of negotiations with a strong candidate company.

 

After re-selling the licensing rights after three years, Celltrion has generated considerable profit.

 

By selling the licensing rights for prescription drugs in the Asia-Pacific region, excluding Korea, Celltrion has generated a profit of around 70 billion won compared to the initial investment of around 140 billion won.

 

If the remaining negotiation for the sale of licensing rights for OTC drugs proceeds smoothly, Celltrion is expected to generate even higher investment profit.

 

Celltrion views the sale of these business rights as a steppingstone to creating a foundation for integrated Celltrion to focus on its core businesses.

 

"Selling the business rights was based on the strategic decision at a time when we are on the verge of significant growth upon the launch of integrated Celltrion.

 

We have successfully concluded the sale, securing stable revenue through maintaining domestic business rights for core prescription drugs and acquiring exclusive product supply," a representative from Celltrion Group stated.

 

"The proceeds from the sale will be invested in strengthening the new product portfolio and establishing a foundation for the sustainable growth of the Celltrion Group," the representative added.