According to a Bloomberg story, Merck and Sanofi will put their animal health unit up for sale and expect to reap at least $1 B in the transaction. Reported suitors include Pfizer, Bayer, Boehringer Ingelheim, Lilly and Novartis. Last week, it was noted here that Big Pharma is increasingly interested in the animal health area as another sales and profit generator. This is seen as an area that can help out those companies with flagging human health pipelines and facing the patent cliff in the next few years. Companies like the ones on the suitors list.
The companion pet market in particular is seen a bigger draw for investors in animal health. The market is less price sensitive than that of agricultural animals and pet owners have shown their willingness to spend on the health of their pets. The market reached $19 B in 2008 and is reportedly growing steadily at 5% annually - a trend that is expected to continue for at least the next five years.
Posted by Bruce Lehr October 2nd 2010.