3M splits drug unit three ways

STORY UPDATE
CHICAGO—January 2, 2007—Graceway Pharmaceuticals announced it completed its acquisition of 3M's pharmaceutical businesses in the United States, Puerto Rico, Canada, and Latin America for $875 million. As part of the agreement, the two companies have entered into manufacturing agreements for the products, as well as technology access and development agreements.
 
 
ST. PAUL, Minn.—3M recently entered into agreements to sell its global branded pharmaceuticals business for approximately $2.1 billion in three regions.
 
Graceway Pharmaceuticals Inc. has agreed to acquire 3M's pharma­ceutical operations in the United States, Canada and Latin America region for $875 million; Meda AB has agreed to acquire 3M's phar­maceutical business in Europe for $857 million; and Ironbridge Capital and Archer Capital have agreed to acquire 3M's pharmaceu­tical operations in the Asia Pacific region, including Australia and South Africa, for $349 million.
 
The agreements are the result of a review of strategic options for the branded pharmaceuticals business and its immune response modifier (IRM) platform that 3M announced in April. Under the agreements, the purchasers will acquire regional marketing and intellectual prop­erty rights for 3M's branded phar­maceuticals, including Aldara, Difflam, Duromine, Tambocor, Maxair, Metrogel-Vaginal and Minitran.
 
3M's Drug Delivery Systems Division will be a source of supply to the acquiring companies for the products. As part of the transac­tion, Graceway Pharmaceuticals also will acquire the rights to cer­tain IRM molecules.
 
"These are great brands and products, and we believe they will thrive in today's very competitive pharmaceutical marketplace under the direction of their new owners," says Brad Sauer, executive vice president, 3M Health Care. "I want to thank our employees for their outstanding contributions to our business and for delivering excel­lent service and quality to our val­ued customers."
 
Approximately 1,050 employ­ees work in 3M's Pharmaceuticals Division worldwide. It is estimat­ed that approximately 70 percent of those employees will receive employment opportunities with the acquiring companies.
 
The transactions are scheduled to close in the fourth quarter, sub­ject to customary closing condi­tions, including regulatory approv­als, and in the case of Graceway Pharmaceuticals, and Ironbridge Capital and Archer Capital, the receipt of financing.
 
3M will record a gain related to the transactions, and in addition, will incur various restructuring charges as it continues to align to drive growth and improve produc­tivity.


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