HONG KONG, Aug 28 (Reuters) - Drugmaker Mundipharma

International, owned by the billionaire Sackler family, has

failed to find a buyer for its China unit for the second time in

a renewed sale process this year, two sources with knowledge of

the matter said.

Mundipharma, the maker of painkiller OxyContin, had hired

Deutsche Bank to run the process, aiming to fetch over $1

billion from the divestment, sources have said.

After two bidding rounds the company failed to seal a deal

with a prospective strategic buyer, the sources said, declining

to be named as the information was private. The identity of the

prospective buyer could not immediately be known.

The valuation Mundipharma targeted was too high for the

interested buyer, one of them said.

It is not immediately clear whether Mundipharma will still

look for a buyer for the China unit.

Mundipharma did not respond to Reuters requests for comment.

Deutsche Bank declined to comment.

The drugmaker's move to put its China business on the block

came as an increasing number of Western firms are pulling back

from the world's second-largest economy amid a slowing economic

growth and heightened geopolitical tensions.

Belgian biopharmaceutical firm UBC announced

the sale of its Chinese neurology and allergy business to

Singapore-based asset management group CBC and Abu Dhabi

sovereign investor Mubadala for $680 million.

Mundipharma, based in Cambridge, Britain, had run a sale

process of the China unit in 2021 which attracted bidders

including Boyu Capital and state-owned Sinopharm, Reuters has

reported.

The potential buyers at the time failed to reach agreement

with Mundipharma due to valuation and contract-related issues,

sources have said.

Mundipharma has a presence across four continents. It

generated $1.7 billion in global sales in 2022 from drugs for

pain management, oncology and respiratory diseases, among

others, its website showed.

The company, which launched its China business in 1993,

lists a number of pain relief drugs on its Chinese website,

including OxyContin, which is used to help relieve

medium-to-severe ongoing pain, mostly applied to cancer

patients.

The painkiller product is at the centre of a $6 billion

settlement the Sacklers agreed to pay for another of their drug

companies, Purdue Pharma LP, to resolve opioid-related

litigation in the United States.

The Sacklers had proposed to use at least $1.5 billion from

a sale of Mundipharma assets for the Purdue settlement.

The U.S. Supreme Court in June blocked Purdue's bankruptcy

settlement that would have shielded its wealthy Sackler family

owners from lawsuits over their role in the nation's deadly

opioid epidemic.

The ruling came after President Joe Biden's administration

appealed to the Supreme Court last August over the ruling of a

lower court in favour of the settlement.