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Mar 12, 2007

Schering-Plough Pads Late-Stage Pipeline with $14B Acquisition of Organon BioSciences

  • Schering-Plough will acquire Organon BioSciences, the human and animal health care businesses of Akzo Nobel, for approximately Euro 11 billion in cash, or about $14.4 billion.

    "It builds on our growing strength in primary care,” remarks Fred Hassan, chairman and CEO, Schering-Plough, “giving us immediate access to central nervous system and women's healthcare products. The acquisition of Organon BioSciences 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 development. In addition, the acquisition of Organon BioSciences enhances Schering-Plough's strength in human and animal biologic products, including the potential to develop human vaccines.

    “In light of Schering-Plough's expanding early pipeline, Organon BioSciences's strong biologics manufacturing capability is a further important asset for the combined company.” Organon's research and manufacturing facility in Oss, The Netherlands, will be the center of Schering-Plough's global gynecology and fertility activities, while Organon's neuroscience research will continue in Newhouse, Scotland.

    “With this acquisition,” adds Hassan, “Schering-Plough will become a leading animal healthcare company, with premier biologics capabilities."

    Organon BioSciences’ had top-line sales of nearly $5 billion, according to Schering-Plough. The pharmaceutical business, Organon, acheived sales of $3.4 billion in 2006 that included products such as a follicle-stimulating hormone for infertility, a muscle relaxant, and contraceptions. Additionally, the animal health business, Intervet, had sales of approximately $1.5 billion in 2006.

    Schering-Plough anticipates that the transaction, expected to close by the end of 2007, will be accretive to EPS by about $.10 cents in the first full year, excluding purchase-accounting adjustments and acquisition-related costs. It also expects to achieve annual synergies of $500 million  three years after closing.

    In addition to the currently marketed products, Organon BioSciences currently has five compounds in Phase III development, including treatment for schizophrenia and acute mania bipolar disorder, a drug to reverse neuromuscular blockade induced during surgical procedures, an oral contraceptive, a long-acting recombinant follicle-stimulating hormone for infertility, and a therapy treatment for insomnia and potentially for hot flashes in menopausal women.


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