J&J Said to Sell Tasmanian Opium-Poppy Processor to SK Capitalby
Tasmanian Alkaloids sale expected to be completed by mid-year
U.S. private equity firm already has contract-drug business
Johnson & Johnson has agreed to sell an opium-poppy processing business in the Australian state of Tasmania to U.S. private equity firm SK Capital Partners LP, according to a person familiar with the transaction.
A purchase agreement has been signed for Tasmanian Alkaloids Pty Ltd., which processes poppies to extract the active ingredients for morphine and other painkillers, said the person, who asked not to be identified because details of the transaction haven’t been announced. The deal is expected to be completed around mid-year, the person said, without giving the value of the transaction.
Representatives of New York-based SK Capital and J&J, the maker of health products such as Listerine mouthwash and Band-Aid, declined to comment. The agreement was earlier reported by Australian news company ABC Rural.
The sale of the business to a private equity firm marks a new era for the state-regulated industry. Tasmanian Alkaloids, formerly a subsidiary of U.S. drugmaker Abbott Laboratories, is one of a limited number of companies granted permission to process poppies to make opiates for medical and scientific needs. SK Capital last year acquired a controlling stake in Halo Pharmaceutical, a supplier of active ingredients to drugmakers.
GlaxoSmithKline Plc sold its opiates business in Australia to India’s Sun Pharmaceutical Industries for an undisclosed sum a year ago. Johnson Matthey Plc, which also manufactures opiates for the U.K. market, last year saw a decline in sales of bulk opiates, mainly codeine, due to a rise in imports. The U.K. company said alternative opiates used in anti-abuse and drug addiction products helped make up for the decline.