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In a move that has caught the pharmaceutical industry by surprise, Akzo Nobel has sold Organon BioSciences to US firm Schering-Plough on the morning when the Dutch group was scheduled to give more details about a much-touted initial public offering for its drugs unit.
Under the terms of the deal, which is expected to be closed by the end of the year, S-P will pay €11bn for Organon, and the latter says the purchase should be accretive to earnings per share by about US$0.10 in the first full year, minus accounting adjustments and acquisition-related costs. S-P expects to save US$500m annually from the acquisition after the first three years.
S-P chief executive Fred Hassan said the transaction was part of a strategy “to transform S-P into a global high-performance company for the long term”. He said it was “the right deal at the right time”, and Organon provided an excellent fit “strategically, scientifically and financially”.
Mr Hassan said the deal gave S-P immediate access to central nervous system and women’s healthcare products and “also fills a gap in our late-stage pipeline by adding five compounds in phase III development and a number of promising projects in phase II”. Also, “in light of S-P’s expanding early pipeline, Organon’s strong biologics manufacturing capability is a further important asset for the combined company”.
Organon’s revenues were up 8% to €2.61bn in 2006, driven by its contraceptives (notably NuvaRing) and infertility treatment Puregon/Follistim® (follitropin beta). Highlights of products in development include the schizophrenia drug asenapine, which despite being dropped by previous partner Pfizer could be filed in the US within the year, and Org 50081, a serotonin-2 blocker for treating insomnia.
For Akzo’s part, chief executive Hans Wijers said “we are convinced that we have found a good home” for the unit, noting that “while an independent future also offered potentially exciting possibilities, the partnership with S-P will give more scope to develop the unique capabilities of Organon”.
PharmaTimes 12/03/2007
