LONDON (The Deal) -- British consumer healthcare and cleaning products company Reckitt Benckiser said on Monday it has decided to spin off its pharmaceuticals unit on the London Stock Exchange within the next 12 months after the division's core Suboxone heroin-withdrawal aid lost U.S. patent protection.
Reckitt, of Slough, England, made the announcement as it released first-half results that showed that pharmaceuticals sales fell 14% to 344 million pounds, while the division's operating profit slipped 20% to 183 million pounds. The Slough, England company, whose group first-half revenue was just under 4.7 billion pounds, put the business up for review in October.
Reckitt CEO Rakesh Kapoor told investors on Monday that the company had decided the pharmaceuticals unit will fare better "under a board that is focused on specialty pharmaceuticals and not on consumer healthcare that wakes up every morning thinking: how can we create value?"
"We are not ruling out selling this business," he said. "The preparations for a separation are to a large extent common whatever the form of the separation but we believe that a demerger is likely to be the route that adds most value."
"We do believe a standalone RBP will be a magnet for interesting business development opportunities," including licensing deals, he added.
The company began the pharma review after the Food and Drug Administration approved two generic alternatives to Suboxone. Reckitt then discontinued its Suboxone tablets and switched to a cheaper, sublingual version of the drug, which it said is proving resilient.