DuPont exits pharmaceuticals business to focus on core businesses
Names Richard De Schutter to head spinoff
On December 14, DuPont (Wilmington, DE) announced that it will spin off its pharmaceutical business. At the same time, the company named Richard De Schutter executive chairman, president and CEO of DuPont Pharmaceuticals, effective January 1. Currently serving as the non-executive chairman of DuPont Pharmaceuticals, De Schutter joined DuPont in July to evaluate various strategic alternatives for the business. He was previously chairman and CEO of G.D. Searle & Co., and chief administrative officer of Pharmacia Corporation. Nick Teti, currently president and CEO of DuPont Pharmaceuticals, has elected to retire, effective December 31.
The decision to get out of the pharmaceutical business follows a six-month review of that operating unit, an effort led by De Schutter. "We have concluded that the full value of DuPont Pharmaceuticals can best be realized outside DuPont," said DuPont chairman and CEO Chad Holliday. "We will evaluate all separation options, including an IPO, and will choose the one that can best contribute to our shareholder value objectives."
According to De Schutter his evaluation of DuPont's pharm business as an appreciating asset was "encouraging."
"DuPont Pharmaceuticals has an exciting early stage pipeline that plays into a number of attractive therapeutic areas; a strong and sustainable franchise in anti-retroviral therapy, led by Sustiva and a number of mature but profitable products," De Schutter commented. "Full realization of the business' potential, however, appears to be best accomplished outside DuPont's total ownership."
Morgan Stanley Dean Witter has been engaged to advise DuPont on its options.
According to reports in Reuters newswire, DuPont Pharmaceuticals consumes nearly one-third of DuPont's $1.8 billion annual R&D budget. Shedding those costs gives DuPont more flexibility to concentrate on its core business, chemicals.
Edited by Angelo DePalma
Managing Editor, Drug Discovery Online and Pharmaceutical Online
adepalma@vertical.net