Ajinomoto to buy P&G’s Japanese osteoporosis drug

Procter & Gamble Co., has agreed to sell Ajinomoto Co. the rights to its Japanese osteoporosis drug for $210 million, days after reports emerged that the consumer products maker is in talks to sell off its pharmaceutical business.

The deal gives the Japanese company the rights to research, develop, manufacture and sell the drug, a licensed product exclusive to the Japanese market, Ajinomoto said in a statement. The drug is marketed under the brand name Actonel.

The deal follows reports that P&G is in discussions to sell its pharmaceuticals business to the investment firm Cerberus Capital Management and to Warner Chilcott Ltd., a maker of specialty drugs. The selling price was pegged at $3 billion. P&G’s total pharmaceutical business generates sales of an estimated $2.2 million.

The Business Courier reported in December that Cincinnati-based P&G was considering selling off some or all of its drug brands. The pharmaceutical business is headquartered in Mason, where it employs more than 500 of its 2,700 pharmaceuticals employees worldwide.

Cincinnati-based P&G (NYSE: PG) is the world’s largest consumer products maker. It will report its fiscal fourth quarter and annual earnings on Aug. 4.

Ranbaxy to set up third unit in Himachal Pradesh

Shimla, India, Pharmaceutical major Ranbaxy and fast moving consumer goods manufacturer Proctor and Gamble (P&G) are among nine companies that have been allowed to set up units in Himachal Pradesh, a senior official said Monday.

“Ranbaxy and Procter and Gamble (P&G) Monday got permission from the state government to set up units in the state,” industries director Manoj Kumar told IANS.

While Ranbaxy will set up its third unit in Solan district on an outlay of Rs.34 crore, P&G will commence its second unit in Baddi with an investment of Rs.18 crore, Kumar said.

Ranbaxy’s first two units are in Sirmaur district, while P&G’s first unit is also located at Baddi.

“We have cleared nine proposals that total an investment of Rs.148 crore,” Kumar said.

The Bharatiya Janata Party (BJP) government has cleared more than 1,500 industrial proposals worth around Rs.10,000 crore in the past 18 months of its tenure.

Himachal Pradesh has 38 industrial areas and 15 industrial estate

Procter & Gamble in talks to sell pharmaceuticals unit

Procter & Gamble is negotiating with Warner Chilcott Ltd. and Cerberus Capital Management to sell its pharmaceuticals business.

citing unnamed sources, said the parties are in “later-stage discussions” and the price tag could be about $3 billion.

The Courier reported in December that Cincinnati-based P&G was considering selling off some or all of its drug brands.

P&G bases its pharmaceutical business in Mason, Canada and Western Europe, and runs plants in New York and Puerto Rico. The company’s key pharmaceutical brands include Actonel – a $1 billion brand – Intrinsa, Enablex and Asacol. The Mason headquarters employs more than 500, with about 2,700 pharmaceuticals employees worldwide.

In a Wednesday morning report, analyst Ali Dibadj, with Sanford C. Bernstein in New York, estimated the sale of the business would likely dilute earnings by 5 cents to 8 cents per share. Dibajd has estimated the pharmaceuticals business sales at $2.2 billion.

"The $3 billion potential valuation is at the lower end of our range, but we are (pleasantly) surprised that a company would be interested in acquiring the business in the first place, given its portfolio and recent performance," he wrote.

Dibadj has said the biggest drugs in the portfolio – osteoporosis medication Actonel and the colitis drug Asacol – have had flat to slow sales growth, in part due to rising generic sales. Those drugs in the portfolio that hold more promise are tied to marketing agreements or have yet to be approved in the U.S.

Warner Chilcott (NASDAQ: WCRX), headquartered in Rockaway, N.J., is a specialty drug maker with a focus on women’s health and dermatology. Cerberus Capital is a private equity firm headquartered in New York.

Procter & Gamble (NYSE: PG) develops, manufactures and markets consumer products and pharmaceuticals.

P&G Drug Unit Closer to Sale, Could Fetch About $3 Billion

Procter & Gamble Co. is getting closer to a possible sale of its prescription-drug business, and several parties, including specialty drug maker Warner Chilcott Ltd., and private-equity firm Cerberus Capital Management LP, are engaged in later-stage discussions, according to people familiar with the matter.

The unit could fetch about $3 billion, these people say.

An acquisition of the P&G business would substantially boost the profile of Warner Chilcott, a New Jersey-based company that focuses on women's health care and dermatology products. Folding in the division would triple Warner's revenue and give it access to drugs that focus on a wide range of women's health concerns.

Warner Chilcott didn't return calls seeking comment.

Cerberus, which proposes acquiring the division and turning it into a stand-alone company, is more circumspect about the transaction, according to people familiar with the situation. But it has lined up preliminary financing from some Wall Street banks, a small sign that banks are getting comfortable financing acquisitions, albeit ones with low amounts of debt financing and very steady cash flows.

"Cerberus can't get it if the strategic buyers are serious. They will pay more than Cerberus for it," said one person familiar with the situation.

The unit -- which makes roughly $800 million in operating profit -- was put on the auction block late last year, in a sales process led by Goldman Sachs & Co. A deal could be wrapped up by the end of summer, according to people familiar with the discussions, though they warned final discussions could still falter.

A P&G spokesman said the company will look at all options to maximize shareholder value, including "continued operations of our strong and profitable business, as well as divestiture of some or all of our pharmaceutical assets."

The division produces osteoporosis drug Actonel, bladder-control drug Enablex, ulcerative colitis drug Asacol and female sexual-dysfunction drug Intrinsa, which hasn't gained approval in the U.S. but is available in some European countries.

P&G will likely focus on one bidder sometime next month, say people with knowledge of the process.

There is at least one other bidder and the situation remains fluid amid the current economic conditions, these people added.

The consumer-products giant, known for its Tide detergent, Pantene shampoo and other staples, declared its drug business a potential divestiture candidate in December and said it would further cut research and development in the division, preferring to invest instead in its over-the-counter health brands, which include Vicks, Metamucil, Crest and Oral-B.

Its best-known drug is Actonel, an osteoporosis treatment for women. The division has annual sales around $2 billion and is headquartered in Ohio.

For years P&G has struggled to gain a foothold in the pharmaceutical industry, having aborted a 2000 plan to swallow drug makers Warner-Lambert and American Home Products. The failed takeover eventually led to the ouster of P&G's chief executive at the time, Durk I. Jager.

By 2006 the company announced plans to end most of its in-house work on drug discovery, investing instead in forging pacts with small biotech companies and universities.

In April, P&G said there had been "significant interest" in the pharmaceutical unit from potential acquirers but that it was still weighing a variety of options for the operation.

Over the past several years P&G has worked to prune slow-growing businesses, including selling off Jif peanut butter, Crisco shortening and Folgers coffee. Meanwhile, P&G has acquired brands in the personal-care and beauty industries, including its $57 billion acquisition of Gillette Co. in 2005.

Defensives lift Dow, S&P; tech weighs on Nasdaq

* Dow positive for the year for first time since Jan

* S&P 500 hits 7 month high

* Dow up 0.3 pct, S&P up 0.1 pct, Nasdaq off 0.2 pct

* For up-to-the-minute market news click [STXNEWS/US] (Updates to close)

NEW YORK, - The Dow moved into positive territory for the year for the first time since early January on Friday, lifted by defensive sectors like pharmaceuticals while a disappointing outlook from National Semiconductor (NSM.N) weighed on technology stocks.

The healthcare sector rose as investors rotated money into defensive plays, which pushed the S&P 500 to a seven-month high. The AMEX Pharmaceutical index .DRG gained 1.2 percent.

Defensive plays are stocks of companies that tend to weather a recession better than others because their products -- such as food or toothpaste or drugs -- are things that people buy, even if they cut spending, in leaner times.

Procter & Gamble Co (PG.N) rose 1 percent to $52.55.

But technology shares weighed on the Nasdaq after chipmaker National Semiconductor Corp (NSM.N) posted quarterly results and gave an outlook that topped Wall Street's estimates, but the guidance fell short in comparison to an outlook earlier this week from fellow chipmaker Texas Instruments (TXN.N).

National Semi's shares slumped 6.1 percent to $13.59 while the PHLX semiconductor index .SOXX, slid 1.8 percent.

The S&P has risen 39.8 percent since hitting a 12-year closing low on March 9, leading some analysts to believe a pullback is in the offing.

"Everybody is waiting for a correction and certainly when that correction comes, those sectors that will do well are your more defensive sectors," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.

The Dow Jones industrial average .DJI gained 28.34 points, or 0.32 percent, to 8,799.26. The Standard & Poor's 500 Index .SPX gained 1.32 points, or 0.14 percent, to 946.21. The Nasdaq Composite Index .IXIC dropped 3.57 points, or 0.19 percent, to 1,858.80.

For the week, the Dow gained 0.4 percent, the S&P 500 added 0.7 percent and the Nasdaq rose 0.5 percent.

For the year, the blue-chip Dow average is up 0.26 percent.

Other defensives such as utilities also rose, with FirstEnergy Corp (FE.N) rising 3.6 percent to $40.48. The S&P Utilities index .GSPU advanced 1.4 percent.

Among the tech bellwethers, iPod and iPhone maker Apple Inc (AAPL.O) shed 2.1 percent to $136.97 and BlackBerry maker Research in Motion (RIMM.O) fell 2.8 percent to $83.02. They were the top two drags on the Nasdaq.

The Reuters/University of Michigan Surveys of Consumers showed consumers' mood in June stood at its highest in nine months, but worries about inflation and labor market uncertainty persisted. For details see [ID:nN12549197]

Shortly before midday, the New York Stock Exchange was hit by a technical glitch that temporarily halted trading in about 240 stocks, including blue-chips General Electric (GE.N), Exxon Mobil (XOM.N) and Bank of America (BAC.N). Server connectivity was restored around 12:10 p.m. (1610 GMT) [ID:nN12377822]

Trading volume was low on the New York Stock Exchange, with only about 857 million shares changing hands, sharply below last year's estimated daily average of 1.49 billion, while on Nasdaq, about 2.05 billion shares traded, below last year's daily average of 2.28 billion.

Declining stocks outnumbered advancing ones on the NYSE by 1,623 to 1,369 while on the Nasdaq, decliners beat advancers by 1,442 to 1,236.

Procter & Gamble moving Iams operation to Mason

Procter & Gamble Co. will move its Iams pet care operation from its birthplace in the Dayton area to Mason, the company said Thursday.

Iams, now called the North American Pet Care unit, will move from Vandalia, north of Dayton, to P&G’s Mason Business Center beginning in early October, according to a news release. All of the unit’s approximately 240 employees will also relocate to Mason.

P&G said in the release that the move will boost productivity and allow for more collaboration between the pet care unit and the oral care, personal health and pharmaceuticals businesses that are housed in Mason. About 2,000 currently work at the complex, on Mason Montgomery Road.

In December, P&G said it planned to sell or otherwise phase out its $2.2 billion, 525-employee pharmaceutical business. But Iams spokesman Jason Taylor said the move is not a sign P&G will be cutting pharmaceutical jobs.

"This is a normal thing, that they would accommodate a move,” he said. "There’s nobody moving out of Mason in order for us to move in there.”

For that matter, a sale of P&G's pharmaceuticals business is not imminent. Analysts have said the business could be a tough sell because of the dearth of financing in the acquisitions market and a lack of blockbuster drugs in its portfolio. Some suggested P&G might have to put off a sale until 2010.

The pet care business produces and markets the premium Iams and Eukanuba dog and cat food lines. P&G acquired Iams in 1999 from founder Clayton Mathile.

About 250 employees at the Iams-Eukanuba manufacturing and R&D complex in Preble County will not be part of the move, the company said.

The Vandalia building, which P&G owns, will be put up for lease or sale, Taylor said.

Procter & Gamble (NYSE: PG), headquartered in Cincinnati, develops, manufactures and markets consumer products and pharmaceuticals.

Teva loses appeal in patent dispute with P&G

Drug developer Teva Pharmaceutical Industries Ltd. said Wednesday a U.S. appeals court upheld a lower court's denial of the company's right to sell a generic version of Procter & Gamble's osteoporosis drug Actonel.

The U.S. Court of Appeals for the Federal Circuit affirmed a Feb. 29, 2008 District Court decision to uphold P&G's patent on the drug. Israel-based Teva said it will not sell a generic version of the drug until the patent expires in 2014.

Actonel was approved in 2000 by the Food and Drug Administration for the prevention and treatment of osteoporosis in postmenopausal women. Osteoporosis is a condition that causes weak bones that are more likely to fracture over time.

Shares of Teva fell 19 cents to $44.92 while shares of Cincinnati-based P&G shed 10 cents to $50.84 in afternoon trading.