Hikma, Mallinckrodt Said to Bid for Boehringer’s Roxane Labs

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Hikma Pharmaceuticals Plc is among bidders for Boehringer Ingelheim GmbH’s Roxane Labs business in the U.S., according to people with knowledge of the matter.

Other potential buyers for the generic pharmaceutical unit, which may fetch as much as 2 billion euros ($2.2 billion), include Mallinckrodt Plc and Perrigo Co., the people said, asking not to be identified because the process is private. A decision on the winner could be made within weeks, though the German drugmaker may still choose to keep the asset, they said.

Closely held Boehringer Ingelheim said in January that it’s exploring strategic options for Roxane Labs, after Bloomberg News reported that the company was working with Morgan Stanley on the process. The unit comprises Roxane Laboratories Inc., and its manufacturing and supply-chain affiliate, Boehringer Ingelheim Roxane Inc.

Options include asset swaps or a sale, the people said. While the drugmaker would prefer an asset swap, such a transaction may be more difficult to carry out than a straight sale, they said.

A spokeswoman for Boehringer said that the company began approaching interested parties for Roxane in April, but was not in a position to comment further on the process. Representatives for Hikma, Perrigo and Mallinckrodt declined to comment.

Attractive Target

Citigroup Inc. analysts said in a research note Tuesday that acquiring Roxane Labs would be a potentially transformational acquisition opportunity for Hikma, even if its chances of prevailing in a bidding war versus Mallinckrodt and Perrigo are “slim.” The analysts said Roxane could be a strong strategic fit for Hikma given its broad portfolio and its previous experience with the seller.

Hikma last year acquired Bedford Laboratories assets from Boehringer Ingelheim’s Ben Venue Laboratories, as well as an option to potentially acquire all of assets of the Ben Venue manufacturing facility in Bedford, Ohio, according to a statement from the company.

Faced with declining sales and expiring patents on certain portfolios, some pharmaceutical companies have been dividing assets into units that can then be split off, or beginning divestment processes for the drugs. While both GlaxoSmithKline Plc and Sanofi announced plans to sell parts of their business last year, the potential divestments were canceled.

UCB SA is trying again to sell its U.S. generics business, Kremers Urban Pharmaceuticals Inc, after a previous $1.5 billion sale to buyout firms agreed to in November fell apart. The business may be now valued at about $1 billion, attracting interest from companies including India’s Lupin Ltd. and Cipla Ltd., people familiar with the matter have said.

Hikma climbed 2.5 percent to 1,933 pence in London, while the U.K.’s benchmark FTSE 100 Index fell 1.5 percent. Mallinckrodt gained 0.3 percent to $115.96 at 12:35 p.m. in New York. Perrigo advanced 0.2 percent to $184.53.

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