Nestlé’s pharma experiment nears an end with USD 10 billion skin health sale talks

Just 5 years after Nestlé took full possession of dermatology specialist Galderma amid a pivot to pharma, the Swiss company is now in the final stage of bailing out of skin health as it refocuses on food and nutrition. Nestlé has entered exclusive talks to sell its skin health unit to a consortium led by private equity EQT Partners for 10.2 billion Swiss francs (USD 10.1 billion). The price tag is much higher than the previously rumored USD 7 billion.

The deal is expected to close in the second half of the year. Upon closing, prescription brands including acne topical treatment Epiduo, aesthetic products such as facial lifter Restylane and consumer solutions Proactiv and Cetaphil – along with about 5000 staffers – will likely leave Nestlé. Nestlé bulked up in medical skin treatments when it shelled out USD 3.6 billion to take full control of Galderma from joint venture partner L’Oréal in 2014. That came as part of the company’s attempt to diversify beyond its sluggish food business and march deeper into the more profitable health sector.

To further fulfill that ambition, it soon moved to a USD 1.4 billion deal with Valeant to gain several cosmetic products, including Restylane.

Nestlé joins several other large corporations that are withdrawing from dermatology. Bayer sold its prescription dermatology portfolio to Dutch company, LEO Pharma, in 2018. The German conglomerate, amid a company-wide overhaul, just inked a deal with Nivea owner Beiersdorf to divest its Coppertone sunscreen for USD 550 million and is also looking to sell its foot care brand Dr. Scholl’s.

Novartis is in the process of offloading its Sandoz US dermatology business, a dermatology development center and about 300 generics to India’s Aurobindo Pharma. Even Allergan has cast off five medical dermatology products – including recently approved antibiotic Seysara – to Spain’s Almirall for up to USD 650 million.