Reckitt Benckiser to spin off heroin treatment business

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Reckitt Benckiser to spin off heroin treatment businessLONDON – Reckitt Benckiser plans to spin its heroin-addiction in the next 12 months as sales slide pressure from rival copycat versions of the drug.

Sales of Suboxone have slumped and Reckitt has two new pharmaceutical projects that could diversify revenue and boost the unit’ valuation.

The British company put Suboxone strategic review in October and in April said leaning towards spinning the business rather a private sale.

Analysts had given a range of valuations for the business due to uncertainty over the longer-term impact of competition from generic versions of Suboxone. Deutsche Bank values at 2.9 billion pounds ($4.92 billion) including debt. Prior estimates from other analysts have ranged from 2 billion to 5.5 billion pounds.

“A trade buyer looks to have remained elusive, with a stockmarket listing the natural, if potentially fraught, alternative,” said Hargreaves Lansdown analyst Keith Bowman. [eap_ad_2] Reckitt did entirely rule out an outright sale if a buyer emerges. has decided whether to keep a stake in Suboxone if opts for a spin-.

Reckitt, which also makes Durex condoms, Finish detergent and Nurofen painkiller, reported a 4 percent rise in first-half sales a constant-currency basis, excluding Suboxone, whose sales fell 8 percent.

The growth in line with many analysts’ expectations.

Reckitt stood by a 2014 target for revenue growth of 4-5 percent this year. It said it expected margin growth, which implies an increase a prior target for the margin to be flat to marginally higher.

Recent efforts to costs have targeted the company’ advertising budget, among other areas.

Bernstein analysts have said that Suboxone – which is sold as a film that dissolves in the mouth – has 79 percent of the large U.. , down from about 85 percent since generics went sale in March last year. (Reuters)[eap_ad_3]