AbbVie to Sell off Allergan Women’s Health Portfolio

22.03.2021 - US pharma AbbVie has put compatriot Allergan’s women’s health business up for sale. The company is said to be working with Morgan Stanley on an auction process that has attracted interest from private equity firms including CVC Capital Partners. Reuters, which broke the story, said AbbVie’s existing women’s health franchise before picking up Allergan is not part of the sale.

Under pressure from an activist investor, Allergan put the business on the sale block in 2018, along with its infectious disease portfolio. It shifted its priorities, however, in preparation for the $63 billion merger with AbbVie that closed early last year.

Allergan’s portfolio, led by oral contraceptive Lo Loestrin, generated EBITDA of about $500 million in 12-month operating profits, and sources speaking to Reuters said AbbVie could potentially get 10 times that sum in proceeds. CVC is thought to be interested in merging the business with Theramex, a Teva women’s health spinoff it bought 3 years ago.

Analysts say AbbVie has been relying heavily on its blockbuster psoriasis and rheumatoid arthritis drug Humira to drive sales and beat revenue forecasts. However, Humira’s US patent protection is expiring in 2023, when it will face biosimilars. Besides, AbbVie needs to pay off around $143.7 billion in debt incurred through the Allergan purchase.

According to pharma journal Fierce Pharma, women’s health has been among the worst hit therapeutic areas for biopharma companies during the pandemic. In 2020, AbbVie’s franchise lost 13.3% on an operational basis to $673 million. Prior to the merger of portfolios, Allergan’s franchise earned $896 million in 2019.

The journal notes also that women’s health businesses are regularly targeted in pharma divestments. Alongside Teva and Allergan, Merck & Co. recently wrapped its women’s health and biosimilar businesses into a new company and is in the process of spinning it off as Organon.

Author: Dede Williams, Freelance Journalist