Teva Pharmaceutical Industries [NYSE and TASE: TEVA] has announced that Teva and the Procter & Gamble Company [NYSE: PG] have agreed to terminate the PGT Healthcare partnership that the two companies established in 2011 to market OTC (Over The Counter) medicines. The separation is planned to take effect July 1, 2018 subject to receipt of applicable regulatory approvals. No significant (material) net financial transfer between Teva and P&G will result from the dissolution.
PGT Healthcare has grown into a significant presence in over 50 countries, mainly in Europe and Asia, using market-leading brands such as Vick's and ratiopharm. However after nearly seven years working together, the companies concluded that their priorities and strategies are no longer closely aligned and each company will take back its own brand and product assets to re-establish independent OTC businesses.
"We have significantly benefited from the PGT partnership and we are parting on good terms", said Sven Dethlefs, Executive Vice President Global Marketing & Portfolio. "We will continue to build our OTC business, based on trusted brands, as a growing and long-term key business for Teva. It is a step in our wider process to bring integration and focus, and it enables us to better leverage synergies between our OTC and Generics businesses. The move creates a solid platform for a strong Teva OTC business, using the assets returning from PGT and the OTC brands acquired primarily through Actavis in 2016."
P&G President, Global Personal Health Care, Tom Finn, commented: "The PGT Healthcare joint venture was highly successful but the decision to dissolve is in the best interest of both parties. We thank the Teva employees who have partnered with us and we wish Teva well as they operate their independent OTC business in the future."
The separation is not expected to have a material effect (impact) on Teva's 2018 financial outlook. As mentioned, the company will merge its OTC interests returning from PGT with a portfolio of OTC assets acquired in 2016 via the Actavis acquisition. In 2017, the combined sales from Teva's PGT OTC products and Teva non-PGT OTC products were approximately $1 billion.