According to sources, the sale of the Chinese unit of the pharmaceutical group Mundipharma has no buyer

By Kane Wu

HONG KONG (Reuters) – Pharmaceutical giant Mundipharma International, owned by the billionaire Sackler family, has failed to find a buyer for its Chinese subsidiary for the second time this year as part of a renewed sale process, two sources familiar with the matter said.

Mundipharma, the maker of the painkiller OxyContin, had hired Deutsche Bank to conduct the trial in order to reap more than a billion dollars from the sale, sources said.

After two rounds of bidding, the company failed to close a deal with a potential strategic buyer, the sources said. They were not named because the information was confidential. The identity of the potential buyer could not be immediately disclosed.

The valuation sought by Mundipharma is too high for the interested buyer, said one of them.

It is not immediately clear whether Mundipharma will still look for a buyer for the China unit.

Mundipharma did not respond to Reuters requests for comment. Deutsche Bank declined to comment.

The pharmaceutical company’s move to put its China business up for sale came at a time when more and more Western companies are withdrawing from the world’s second-largest economy amid slowing economic growth and increasing geopolitical tensions.

Belgian biopharmaceutical company UBC announced the sale of its Chinese neurology and allergy business for $680 million to Singapore-based asset management group CBC and Abu Dhabi state investor Mubadala.

Mundipharma, based in Cambridge, UK, had initiated a sale process for its China unit in 2021, attracting bidders such as Boyu Capital and state-owned Sinopharm, Reuters reported.

According to sources, the potential buyers were unable to reach an agreement with Mundipharma at the time due to valuation and contractual issues.

Mundipharma has a presence on four continents, and the company’s website states that the company will generate $1.7 billion in global sales in 2022 from drugs for pain management, oncology and respiratory diseases, to name a few.

The company, which launched its China business in 1993, lists a range of painkillers on its Chinese website, including OxyContin, which is used to relieve moderate to severe persistent pain and is primarily used in cancer patients.

The painkiller is at the center of a $6 billion settlement that the Sacklers agreed to pay on behalf of another of their pharmaceutical companies, Purdue Pharma LP, to resolve an opioid-related lawsuit in the United States.

The Sacklers had proposed using at least $1.5 billion from a sale of Mundipharma assets for the settlement with Purdue.

The U.S. Supreme Court in June blocked a settlement in Purdue’s bankruptcy case that would have protected the wealthy Sackler family owners from lawsuits over their role in the country’s deadly opioid epidemic.

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The ruling came after President Joe Biden’s administration appealed a lower court’s decision in favor of the settlement to the Supreme Court last August.

(Reporting by Kane Wu in Hong Kong, additional reporting by Andrew Silver in Shanghai; Editing by Sumeet Chatterjee and Kim Coghill)