By Kane Wu
HONG KONG (Reuters) – Drugmaker Mundipharma International, owned by the billionaire Sackler family, has failed to find a buyer for its China unit for the second time in a renewed sale process this year, two sources with knowledge of the matter said.
Mundipharma, the maker of painkiller OxyContin, had hired Deutsche Bank to run the process, aiming to fetch over $1 billion from the divestment, sources have said.
After two bidding rounds the company failed to seal a deal with a prospective strategic buyer, the sources said, declining to be named as the information was private. The identity of the prospective buyer could not immediately be known.
The valuation Mundipharma targeted was too high for the interested buyer, one of them said.
It is not immediately clear whether Mundipharma will still look for a buyer for the China unit.
Mundipharma did not respond to Reuters requests for comment. Deutsche Bank declined to comment.
The drugmaker’s move to put its China business on the block came as an increasing number of Western firms are pulling back from the world’s second-largest economy amid a slowing economic growth and heightened geopolitical tensions.
Belgian biopharmaceutical firm UBC announced the sale of its Chinese neurology and allergy business to Singapore-based asset management group CBC and Abu Dhabi sovereign investor Mubadala for $680 million.
Mundipharma, based in Cambridge, Britain, had run a sale process of the China unit in 2021 which attracted bidders including Boyu Capital and state-owned Sinopharm, Reuters has reported.
The potential buyers at the time failed to reach agreement with Mundipharma due to valuation and contract-related issues, sources have said.
Mundipharma has a presence across four continents. It generated $1.7 billion in global sales in 2022 from drugs for pain management, oncology and respiratory diseases, among others, its website showed.
The company, which launched its China business in 1993, lists a number of pain relief drugs on its Chinese website, including OxyContin, which is used to help relieve medium-to-severe ongoing pain, mostly applied to cancer patients.
The painkiller product is at the centre of a $6 billion settlement the Sacklers agreed to pay for another of their drug companies, Purdue Pharma LP, to resolve opioid-related litigation in the United States.
The Sacklers had proposed to use at least $1.5 billion from a sale of Mundipharma assets for the Purdue settlement.
The U.S. Supreme Court in June blocked Purdue’s bankruptcy settlement that would have shielded its wealthy Sackler family owners from lawsuits over their role in the nation’s deadly opioid epidemic.
The ruling came after President Joe Biden’s administration appealed to the Supreme Court last August over the ruling of a lower court in favour of the settlement.
(Reporting by Kane Wu in Hong Kong, additional reporting by Andrew Silver in Shanghai; Editing by Sumeet Chatterjee and Kim Coghill)
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