Bayer Acquires Merck Consumer Care Business To Increase OTC Offerings
By Cyndi Root
Bayer announced in a press release that it will acquire Merck’s consumer care business. The purchase improves Bayer’s position in the over-the counter (OTC) category in Latin America and North America. The merged companies also intend to collaborate on sGC modulators. Bayer paid about $14 billion for Merck, and Merck will pay Bayer $1 billion upfront for the sGC modulators and will make milestone payments.
Dr. Marijn Dekkers, Bayer CEO, said, “This acquisition marks a major milestone on our path towards global leadership in the attractive non-prescription medicines business. At the same time we are leveraging our capabilities in the cardiovascular therapeutic area.”
Merck’s OTC Products
The Merck acquisition significantly improves Bayer’s positioning in the OTC market, as Merck’s consumer care business brought in $2.2 billion last year.
Bayer recently completed an overhaul and repositioning of its own line of OTC products so the Merck purchase gives Bayer the number two spot globally in OTC drugs. The product line includes cold and flu, dermatology, and gastrointestinal. Brand names include Dr. Scholl’s, Claritin, Afrin, and Coppertone.
Bayer’s sGC Modulators
Bayer and Merck have also agreed to develop and market soluble guanylate cyclase (sGC) modulators, candidates in cardiovascular disease treatment. Bayer states that this therapeutic area is compelling because it represents a high unmet need. SGC modulators show promise but a major effort is needed to explore their potential in development and in the clinic. Bringing the two companies together creates a partnership between leading companies that are both invested in the compounds’ development. The two companies intend to review all the sGC compounds, particularly Adempas (Riociguat) and vericiguat.
M & A Landscape
The mergers and acquisitions landscape is quickly changing as many leading pharmaceutical companies like Bayer and Merck are exploring the benefits of buying or merging with other companies. Recently, Novartis and GlaxoSmithKline swapped assets, giving Glaxo the benefit of Novartis’ OTC line. Pfizer is aggressively pursuing AstraZeneca and other companies are partnering on projects. Bayer’s CEO Marijn E. Dekkers said that one of the reasons that mergers, acquisitions, and partnerships are increasing is because companies want better bargaining position when they negotiate shelf space with retailers.