Reckitt Benckiser considering separate listing of drug unit

Reckitt Benckiser, the maker of Cillit Bang cleaning products, said today that a separate stock listing for its pharmaceutical business was a “strong option” as it reported in-line first quarter results.

The company’s non-pharmaceutical divisions reported a total 4pc growth in sales to £2.1bn while its pharmaceutical division fell by 11pc to £170m in the first quarter. The company was boosted by a strong performance in its Health unit, which includes Scholl and Gaviscon.

Reckitt Benckiser announced that a strategic review of its pharmaceutical business in October after being tipped as a spin-off candidate as it is at odds with the rest of the British company’s core brands which also include Finish dishwasher tablets and Gaviscon.

The company today said: “All options continue to be considered. A capital markets solution is emerging as a strong option”.

The news that it is considering a potential IPO of the business, six months after first announcing the strategic review, reaffirms the difficulty the company has had in finding willing buyers.

Sources familiar with the process have said that it will be a difficult sale.

The pharmaceutical division is made up of just one marketed drug – a heroin addiction treatment called suboxone that is dispensed in a dissolvable film. The company today released an information pack on the pharmaceutical unit – a move seen by some as a “warm-up” for prospective investors.

Reckitt Benckiser previously manufactured the same heroin substitute drug treatment in tablet form. It stopped making the drug blaming safety concerns that the pill packaging could be tampered with by children.

The decision was attacked as a desperate move by industry commentators and was seen as a ploy to protect the drug from imminent generic competition rather than protect children.

Reckitt Benckiser had been anticipating stiff generic competitors Amneal and Actavis to its pill formula, however its film based treatment, which dissolves on the tongue, is patent protected.

Reckitt was referred to competition authorities for the move which was seen to be an attempt to pressure medicine regulators to block the introduction of cheaper alternatives. The US Food and Drug Administration (FDA) threw out the group’s petition to introduce regulatory changes on the marketing of opioid dependency drugs and allowed Amneal and Actavis to proceed with selling them.

The company is also facing generic threat for its film version of Suboxone, however rivals IntelGenx and Actavis are prevented from launching for 30 months after Reckitt claimed they infringed patents on the film technology.

Since 2002 the pharmaceutical division has grown to represent around 7pc of total group sales and 13pc of profits this year.