UK drug giant GlaxoSmithKline has shed the majority of its 'Classic Brands' - 25 non-promoted and genericised products - in Australia to Aspen for around £172 million in cash.
The brands included in the deal - such as the herpes drug Valtrex (valaciclovir), Lamictal (lamotrigine) for seizures and bipolar disorder, the antibiotic Amoxil (amoxicillin) and the antidepressant Aropax (paroxetine) - collectively generated sales of about £83 million last year and £31 million for the first quarter of 2012.
Explaining the rationale behind the deal, the firm noted that sales of these products have been in decline because of local pricing reductions and generic competition.
The move also comes under a broader strategy to boost and enhance shareholder returns by selling off low growth or non-core businesses, leaving a greater focus on "priority brands, products and pipeline opportunities that have long term growth potential" and thereby simplifying activities.
Net cash proceeds from the deal are expected to be around £155 million, while net profit on this disposal in 2012 should be around £131 million (pre-tax), £121 million (post-tax), and will be recorded in its books as a non-core item, GSK said.
The divestment should complete in the fourth quarter of this year, and comes on the back of three other similar GSK deals: in April Aspen bought 19 international OTC products for £164 million; in March Omega Pharma took some non-core brands for £391 million; and in December last year Prestige snapped up US, Candian and European OTC drugs for £426 million.