As part of an effort to focus on cancer drugs, vaccines, and animal health, drug manufacturer Merck plans to spin off $6.5 billion in assets, or 15% of its prescription drug sales, into a new, publicly traded company.
The nearly 90 medications, which have lost patent protection, include women’s health products, such as contraceptives NuvaRing and Nexplanon, and cholesterol treatments like Zetia (ezetimibe) and Vytorin (ezetimibe and simvastatin).
The move will save Merck more than $1.5 billion by 2024 and reduce the company’s manufacturing footprint by approximately 25%, the company said in a news release. The shift is expected to be completed during the first half of 2021.
Merck’s plan follows a trend in which large drug makers are offloading legacy medicines with lackluster sales in favor of products with rapid sales growth potential, such as cancer drugs and experimental therapies. The new company will be based in New Jersey with more than 10,000 employees and also will handle Merck’s biosimilar candidates.