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J&J, Novartis, Takeda said to eye Brazil drug maker

April 25, 2017

There are rumors that Johnson & Johnson (JNJ), Novartis AG (NVS) and Takeda Pharmaceutical (TKPYY) are discussing a buyout of Brazilian pharmaceutical company Hypermarcas SA (HYPE3).

The controlling percentage of Hypermarcas shares are owned by two family-investment groups, Igarapava Participacoes SA and Maiorem SA de CV. The two groups hold a combined 34 percent of the company. The two groups have reportedly hired the investment banking firms Banco Bradesco SA and Credit Suisse Group AG to provide guidance on a possible sale.

Reuters reported that two unidentified sources say that talks are ongoing. Brazilian billionaire Joao Alves Queiroz Filhoo owns Igarapava and a Mexican family owns Maiorem. If their stakes are acquired, it would, according to Reuters’ source, “automatically trigger a buyout of minority shareholders.”

Reportedly no formal, binding proposals have been submitted.

Hypermarcas is Brazil’s largest listed drug maker. For the last two years, the company has focused on over-the-counter drugs. It also raised about $1.5 billion from the sale of several of its personal care brands to Coty (COTY.N), Reckitt Benckiser Group (RB.L) and Ontex Group NV (ONTEX.BR).

Headquartered in Sao Paul, Brazil, Hypermarcas was founded in 2001 and has about 8,787 employees. It offers sweeteners under the names Adocyl, Finn and Zero-Cal. Its lead brands are Addera D3, Alivium, Benegrip, Biotonico Fontoura, Doril, Engov, Epocler, Histamin, Lisador, Polaramine, Predsim, Rinosoro, and Torsilax.

The company also offers products for child care and health, including absorbents, antiseptics, baby bottles, baby powers, toothbrushes and dental products, such as floss. Its pharmaceutical lines include over-the-counter medications such as laxatives, antacids, and nasal decongestants. Its prescription medications are marketed under the Farmasa, Neo Quimica, and Luper names.

As a result of the rumors, Hypermarcas shares closed up 3.8 percent yesterday, at 30.35 reais. The company’s market cap is about $6 billion (U.S.). Its overall extended gains yesterday were 7 percent to an all-time high of 31.38 reais.

Lauro Jardim, a columnist with O Globo, reported on Sunday that Queiroz and his family were discussing a sale of their stake in Hypermarcas with several foreign companies. Jardim did not identify how he acquired that information.

In January, Johnson & Johnson acquired Switzerland-based Actelion (ALIOF.PK) for $30 billion in cash. As part of that deal, Actelion will spin off its research-and-development pipeline into a new standalone company. Actelion (ALIOF.PK) focuses on rare drugs. It recently brought two new drugs on the market with potential blockbuster status. They are Opsumit and Uptravi, both to treat pulmonary arterial hypertension (PAH), a form of high blood pressure that affects arteries in the lungs. Actelion’s lead product is Tracleer, for PAH, which is facing generic competition this year.

Earlier this month, Novartis exercised an option to in-license ECF843 for dry eye and other ophthalmic indications from a four-person biotech company, Lubris BioPharma, based in Boston. Novartis’ ophthalmology and dry eye treatments include Systane, Tears Naturale and Genteal.

Also in early April, Takeda inked a global collaboration deal with Somerville, Mass.-based Finch Therapeutics to jointly develop FIN-524. FIN-524 is a live biotherapeutic product made up of cultured bacterial strains that have been associated with favorable clinical outcomes in research of microbiota transplantations in inflammatory bowel disease (IBD). Finch will receive $10 million upfront for exclusive worldwide rights to develop and commercialize the compound. It also will gain rights to follow-on products to IBD, and be eligible for various milestone payments and tiered royalties on worldwide net sales.

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