The drug delivery division makes transdermal drug patches, microneedle delivery systems, nasal devices, oral inhalers and packaging films for drug delivery. 3M is also developing a smart inhaler and is looking for pharmaceutical partners for the project.
Bloomberg quoted people with knowledge of the matter, who said that the St. Paul, Minn.-based conglomerate was working is working with an advisor to stage an auction for the business. The people told Bloomberg that the auction would likely draw interest from private equity firms.
3M reported third-quarter 2019 drug-delivery sales of $99 million, down from $102 million for Q3 2018. For the nine months ended Sept. 30, 2019, sales totaled $301 million, down about 11% from the same period of 2018.
3M did not immediately respond to a request for comment.
In October, 3M closed a $6.7 billion buyout of wound care giant Acelity from the private equity consortium that took the company private back in 2011. It was the largest purchase in the company’s history.
While not addressing the drug-delivery business specifically, 3M CEO Mike Roman discussed the company’s business strategy at the Credit Suisse’s 7th annual industrials conference last week.
“It’s prioritizing our organic investments to the most attractive spaces and managing a portfolio around differentiated investment strategy,” Roman said in a transcript from Seeking Alpha. “It’s taking a look all the time at what parts of our portfolio are less able to leverage the fundamental strengths or maybe or structurally, the markets aren’t as attractive for our fundamental strengths over time. And we should be doing something different.
“Maybe we manage those more for cash flow because we’re the best owner of them. But maybe there’s a better natural owner out there. And we’ve — a number of divestitures that we’ve made, that’s where they come from,” Roman added. “There’s a better natural owner out there. We can create more value for 3M shareholders by divesting those assets.”
MMM was down 0.93% to $169.88 in mid-morning trading today.