Merck & Co sells OTC joint venture to Johnson & Johnson for $175 million
29 September 2011
US drug giant Merck & Co yesterday said that it has sold its 50-per cent interest in its Johnson & Johnson-Merck Consumer Pharmaceuticals (JJMCP) joint venture to J&J's McNeil business for $175 million, giving its JV partner the North American rights for certain over-the-counter drugs (OTC).
The 22-year-old JV between Merck and J&J was formed in 1989 to develop, manufacture, market and distribute Pepcid, Mylanta, Mylicon and other local OTC brands in the US and Canada.
The sale includes a manufacturing facility in Lancaster, Pennsylvania, but Merck will continue to hold the rights for these drugs outside the US and Canada.
Following the transaction, J&J, the diversified healthcare company will own the venture's assets, which include the exclusive rights to market OTC Pepcid, Mylanta, Mylicon and other local OTC brands where they are currently sold in the US and Canada.
New Jersey-based Merck said that it decided to sell its interest in the joint venture to enable the company to fully focus on building the long-term growth prospects of the wholly-owned consumer products division that had been part of Schering-Plough prior to the 2009 merger.
Termination of the JJMCP venture also gives Merck greater freedom to operate in the OTC consumer sector, allowing Merck to fully exploit its pipeline of Rx-to-OTC switches as well as actively pursue OTC licensing activities in the US and Canada.
New Brunswick, New Jersey-based J&J said it will rename the business McNeil Consumer Pharmaceuticals Co. and said the acquisition will allow its McNeil division to expand its digestive health business.