By Jessica Toonkel

NEW YORK (Reuters) - Japanese drugmaker Astellas Pharma Inc is looking to sell its dermatology portfolio, which could be worth between $500 million and $1 billion, according to three people familiar with the situation.

Astellas has hired London-based investment banking boutique DC Advisory to sell the assets, according to two of the people, who wished to remain anonymous because they are not permitted to speak to the press.

The company's dermatology portfolio, which includes a drug to treat eczema called Protopic, sells products around the world.

The drugmaker, which has $23 billion in market capitalization, is discussing breaking up the business and selling the pieces to different parties to generate a greater premium, said one of the people.

It is unclear how much each of the businesses would fetch.

Breaking up the portfolio and selling it to different parties makes sense particularly because the U.S. patent for Protopic is set to expire next year, opening it up to generic competition, said another of the three persons.

Astellas declined to comment. DC Advisory did not return calls requesting a comment.

(Editing by Maureen Bavdek and Matthew Lewis)

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