Bristol-Myers Squibb inks $438m OTC drug deal with Reckitt Benckiser

US-based pharmaceutical company Bristol-Myers Squibb (BMS) has announced that it has inked a three-year collaboration agreement valued at $438m with British multinational consumer goods company Reckitt Benckiser.

Under the agreement, Reckitt Benckiser will hold rights to sell several of BMS over-the-counter (OTC) medicines across Latin America, primarily in Mexico and Brazil.

The transaction also includes a $44m option fee that gives Reckitt the ability to buy certain Bristol-Myers brands outright at the end of the collaboration agreement.

Under the agreement, Reckitt Benckiser will sell, distribute and market the following medicines: Picot, an antacid, Tempra, a pain reliever and fever reducer, Micostatin, an antifungal, and Graneodin, a cough and cold medicine, sold primarily in Mexico; and Dermodex, an anti-rash cream, Luftal, an anti-gas medicine, and Naldecon, a cold and flu symptoms treatment, sold primarily in Brazil.

The purchase would include the sales, marketing and distribution rights of the medicines, along with assets related to the products, including trademarks and remaining inventories.

The purchase price will be based on average net sales during the two year period preceding the closing of the sale.

As part of the deal, no manufacturing facilities will be transferred from BMS to Reckitt Benckiser Group.

BMS Intercontinental Region and Japan executive vice president and chief financial officer Charles Bancroft said the new move was part of firm’s BioPharma strategy, which worked to focus its businesses globally on innovative medicines in areas of high unmet medical need.

"This agreement allows us to increase our focus on the launch and commercialization of our innovative portfolio in these important markets in Latin America," Bancroft added.

The transaction is subject to the satisfaction or waiver of customary closing conditions, including competition law authorizations in Brazil and Mexico.

The transaction took place with Jefferies Group serving as exclusive financial advisor to Bristol-Myers Squibb, while Kirkland & Ellis served as its legal adviser.