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Altana and Serono seeking mergers

Published on 30/11/05 at 11:01am

Two of European pharma's mid-sized companies, Serono and Altana, have separately declared their openness to takeover talks, with Pfizer and Novartis among those tipped as potential suitors.

Talk of mergers and acquisitions is never far away in the sector, particularly for those companies facing strategic problems - and Serono and Altana are no exception.

Altana's chief executive Nikolaus Schweickart said he could not rule out looking for a strategic partner, following a string of problems which have hit the company.

The German pharmaceutical and chemicals group had earmarked two new treatments to offset the fall in sales of stomach ulcer treatment Protium (Protonix in the US), its sole blockbuster which goes off patent in 2009.

But development of its chronic obstructive pulmonary drug (COPD) Daxas has faltered after disappointing trial results, and resulted in Pfizer terminating plans for co-marketing of the drug.

Altana had poured millions into developing Daxas and its asthma drug Alvesco but a regulatory setback has denied the latter revenue from the all-important US market. Sales of Alvesco are not expected to exceed E10 million this year.

The company's woes have invited speculation of a possible takeover bid, with Novartis, Wyeth, Sanofi-Aventis named as potential buyers.

Altana's strong respiratory franchise makes it a possible target for Novartis whose chairman Daniel Vasella is determined to challenge industry leader Pfizer and is a vocal advocate of consolidation.

Sanofi-Aventis, which helped develop Alvesco, and Wyeth, which co-markets Altana's top-selling product Protium, could also be in the running.

Altana's intentions remain unclear but it has hired Goldman Sachs to look at its options including selling its pharmaceutical business, which is valued at around E5 billion.

Serono, Europe's largest biotech company, like Altana, has faltered in developing drugs and is largely reliant on its multiple sclerosis treatment Rebif, which last year accounted for almost half the company's sales.

Earlier this year Serono halted development of a late-stage psoriasis drug and stopped another trial for new skin cancer drugs - two treatments it hoped would offset its reliance on Rebif.

The Swiss-based company has admitted it is examining 'strategic alternatives', with Pfizer and Amgen tipped as potential suitors.

The attractiveness of Serono and Rebif are looking less certain as a number of companies progress in the development of a new generation of oral multiple sclerosis treatments.

These will be more convenient than injectable ones like Rebif, and market issues such as these could ward off potential buyers, as could doubts about Serono's in-house pipeline.

One option could be for Altana and Serono to merge but analysts say their divergent portfolios and locations would make it difficult to cut costs in R&D and other business areas.

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Serono hit by two late-stage failures

Friday , April 08, 2005



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