Pharmaceutical Giants Make Moves
GlaxoSmithKline PLC, Europe's biggest pharmaceutical company, is a front-runner in talks aimed at a possible buyout of the drug business of German rival Bayer AG, published reports said Monday.
GlaxoSmithKline is looking closely at a deal following last week's decision by Bayer to drop its insistence on maintaining majority control of its pharmaceuticals division. A sale would be worth around $8 billion, The Daily Telegraph reported.
GlaxoSmithKline refused to comment on the reports, calling them market speculation. Bayer also refused to comment.
At the same time, Swiss pharmaceutical giant Roche said Monday said it had bought the rights to the cancer drugs of struggling British biotechnology company Antisoma.
Roche will initially pay $6.56 million to acquire a 10 percent minority stake in Antisoma. The Swiss company also will make an upfront cash payment of $37 million to gain exclusive worldwide rights to the cancer products now in clinical development, as well as those that get as far as human testing over the next five years. The initial payment is worth more than Antisoma's market value as of the end of trading Friday.
"We feel very fortunate to have identified such an attractive biotech partner as Antisoma in an area of strategic importance to Roche," said William M. Burns, head of the pharmaceuticals division at the Swiss company. "Considering its size and resources, Antisoma has demonstrated an ability to create a significant portfolio of promising product candidates."
Other drug-makers, including Switzerland's Roche, are also said to be interested in Bayer's drugs division. However, GlaxoSmithKline is seen as the likeliest buyer, due partly to its previous experience in joint marketing with Bayer, the Telegraph said, quoting unnamed industry sources.
The biggest of these joint efforts involves Levitra, an anti-impotence drug that the two companies hope will compete with Pfizer's Viagra after its launch it next year.
GlaxoSmithKline is also seeking ways to augment its relatively small product backlog, The Independent reported. Several of the British company's patents expired this year.
Bayer, which invented aspirin, would give GlaxoSmithKline several new product lines, including the anthrax treatment Cipro.
Bayer, based in Leverkusen near Cologne, has been selling peripheral businesses and seeking partners for core units after warning last year that a string of setbacks would cut deep into earnings. One of its biggest setbacks was the withdrawal of the cholesterol-lowering drug Lipobay, also known as Baycol, after it was linked to patient deaths.
London-based Antisoma like many young biotechnology companies was facing a cash crunch. Under the deal, the company will continue developing drugs while Roche will have the option of co-developing and marketing selected products globally.
Antisoma chief executive Glyn Edwards said the deal means his company is unlikely to have to return to the market for cash. The firm will also be able to step up research and development.
Antisoma almost ran out of cash earlier this year, but was able to raise more than 20 million British pounds ($31.6 million) in a public offering in February.
Roche said it will cover the remaining development costs of Antisoma's drug Pemtumomab. Pemtumomab is in phase three clinical development for ovarian cancer and phase two for gastric cancer.
Analysts say the drug could hit the market in 2005. Antisoma has three other drug candidates in the early stages of clinical testing, Roche said.
The deal is subject to antitrust review in the United States.