Hoechst Begins Withdrawal From Generics Business

Hoechst Marion Roussel, the drugs division of the German group Hoechst,has started to implement the plan to divest its generic drug businesses by agreeing to sell Rugby Laboratories to US pharmaceutical company Watson.

Although precise details of the deal have not been disclosed, Watson will acquire the group for an initial $70 million, with further payments being based on future operating results. The California-based group also noted that Rugby has projected sales of $150 million for 1997 and that the acquisition will almost double the number of generic products it makes.

This latest move comes in the wake of HMR's report to shareholders which laid out its strategy of concentrating on innovation-oriented products. According to Reuters, the company added that the decision to exit the generics industry was prompted by "the deterioration of the US generic pharmaceutical market in the last two years." The company's generic businesses generated $201 million in the first six months of 1997, down 17.3% on the corresponding period last year.