Novartis animal health business draws interest from Eli Lilly and Merck

Novartis's animal-health business is drawing interest from drugmakers including Eli Lilly and Merck as the Swiss pharmaceutical giant prepares to sell the unit, people with knowledge of the matter said.

Bayer is also preparing for a potential auction of the unit, which makes Sentinel flea control tablets for dogs and the Vira Shield antiviral medicine for cattle.

Novartis hasn't yet invited bids for the business and none of the potential bidders has made an offer, said sources. The company is working with Goldman Sachs Group on a review of its portfolio that may lead to a sale of the veterinary business, according to sources.

Drugmakers are weighing options for their veterinary units as they seek to boost the valuation that investors award those operations.

Bayer is interested in expanding in animal health, chief executive Marijn Dekkers said yesterday. Merck said in October that its veterinary business may be divested or partnered outside the company, while Pfizer in June completed the spinoff of its Zoetis animal-health unit.

Citigroup analysts valued the Novartis veterinary unit at about $4 billion including net debt in October. Novartis does not publicly report separate financial results for the business.

Spokesmen for Eli Lilly and Merck declined to comment.

Speaking at a conference in London yesterday, Mr Dekkers and Novartis chairman Joerg Reinhardt declined to comment on the animal-health business sale.

Reuters reported earlier in the day that Bayer is a potential bidder for the unit.

Novartis is weighing the sale of several units, including the over-the-counter medicines unit and vaccines operation. The drugmaker wants its businesses to be among industry leaders or it will consider divesting them, chief executive Joe Jimenez said last month.

The company hasn’t made any final decision on whether to divest any units, said Mr Reinhardt. – (Bloomberg)