Reckitt Benckiser to Spin Off Suboxone Unit to Shareholders  E-mail
Addiction Treatment Industry Newswire

08/01/2014 -ATIN - Reckitt Benckiser, the British household products group whose pharmaceutical division consists almost solely of the blockbuster  opiate treatment drug Suboxone, has decided to spin off the Suboxone business to shareholders in a deal estimated to be worth $3B British Pounds, or approximately $4.2B. The move follows the increasing encroachment of generics and other competitive anti-opiate drugs into a market that Suboxone once dominated completely - except for methadone - and which has made a fortune for Reckitt and its shareholders over the years and continues to be enormously profitable but has turned into a much more complex business. In essence Reckitt's pharmaceutical enterprise will become a separately traded entity called Reckitt Benckiser Pharmaceutical, RBP, with shares in the new company becoming distributed to Reckitt shareholders in a formula that will be worked out as the time to close the spinoff deal over the next year draws closer.

A Pioneering Drug Company

Despite the fact that Reckitt is much better known worldwide for its household products like Lysol and many other brands, a business that has been booming, especially in the developing world, the company decades ago made a pioneering and very astute bet on a compound called buprenorphine, the active ingredient in Suboxone that is an opiate with unique qualities. Buprenorphine binds completely to opiate receptors, and thus shuts down withdrawal symptoms, but for non-opiate naïf opiate addicts produces minimal to none of the euphoria that opiate users crave when they seek out their opiate drug. Pouring millions into research and into a highly unusual legal campaign to get the drug allowed to be prescribed by doctors in their offices Suboxone took off and has basically revolutionized the treatment of opiate addiction. The success, needless to say, has sparked competition and has, indeed, helped foster a highly unusual, but much needed, phenomenon - the specialty addictions pharmaceutical enterprise. And by spinning off their Suboxone unit to shareholders that is essentially what Reckitt Benckiser hopes to achieve with RBP an independently run pharma focused enterprise: a specialty addictions pharmaceutical company.

"A Promising Pipeline"

After losing patent protection for Suboxone in 2009, press reports have RBP developing a nasal opiate overdose antidote product, as well as working on an alcohol drug with a name so obtuse I won't subject my readers to it, except to say that even with all the publicity and rise in opiate addiction, opiates and all other drugs combined still do not even come close to matching the number of alcohol "poisonings" - the alcohol equivalent of a drug overdose - that occur each year, not to mention the huge medical bills that come behind alcohol abuse estimated by some to amount to as much as 20 percent of all medical costs. So needless to say if RBP can score with an alcohol drug even on a fractional basis the way it scored with buprenorphine, it would have a major hit on its hands.

Enormous Credibility

Unfortunately, some of the specialty addictions treatment/pharma concerns - and we emphasize only some - have a fly-by-night type of stature, with some having penny stock type stock listings. A spun off, separately traded RBP, well capitalized and with its still enormously profitable, but not as fast growing anymore Suboxone business, would bring enormous credibility to the newly developing addictions specialty pharmaceutical space.   

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Ted Jackson


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