NEWS OF THE WEEK PHARMACEUTICALS
UCB TO ACQUIRE SCHWARZ PHARMA Multi-billion-dollar purchase continues European drug industry consolidation
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CB, A BELGIUM-BASED BIO-
pharmaceutical firm, has agreed to buy Schwarz Pharma, Monheim, Germany, for $5.6 billion. This marks the third acquisition involving midsized, family-owned European pharmaceutical companies in less than a week (C&EN, Sept. 25, page 16). Schwarz markets a patented drugforParkinson's disease and has therapies in late-stage development for neuropathic diseases, epilepsy, and restless leg syndrome. It also has a sizable generic drug portfolio, including the first generic version of AstraZeneca's Prilosec. Its sales last year were $1.3 billion.
DEVELOPMENT Schwarz Pharma's headquarters in Monheim, Germany, houses a company research hub.
G O V E R N M E N T
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The combined company, which will be called UCB, will have annual sales of $4.2 billion and an annual R&D budget of close to $1 billion. Headquartered in Belgium, it will have operations in Germany, the UK., and the U.S. "The proposed combination with Schwarz Pharma is a leap forward in building UCB into a global biopharmaceutical leader focused on selected disease areas, especially neurology, inflammation, and oncology," says UCB CEO Roch Doliveux. "It provides the opportunity to leverage our leading US. and EU neurology franchise with new medicines ready to be marketed,"
POLICY
DRUG SAFETY STUDY Institute of Medicine calls for overhaul of FDA's monitoring of approved drugs
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the safety ofnew drugs needs a serious overhaul, says a report from the Institute of Medicine. The system for monitoring the safety of drugs after they are marketed is hampered by a lack of clear regulatory authority, chronic underfunding, scarcity of postapproval data, and organizational problems, IOM says. The committee that wrote the report offered a broad set of recommendations to improve drug safety. For two years after approval, drugs should have a black triangle on the label indicating that the drug is new. The committee also would favor a ban on direct-toconsumer advertising for the first
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two years, but acknowledged that such a moratorium would be subject to legal challenges. In addition, FDA needs increased enforcement authority and better enforcement tools—including fines, injunctions, and withdrawal of drug approvals—to ensure that industry complies with label changes and conditions imposed on new products after approval. There also should be a mandatory requirement that all clinical trial results be posted on a federal website to facilitate public access to safety information, the committee says. "We found an imbalance in the regulatory attention and resources available before and after drug approval," says Sheila P.
he says. "The two companies are a perfect fit." As with Merck KGaA's acquisition of Serono and Altana's sale of its pharmaceuticals unit to Nycomed, both announced last week, analysts say the UCB-Schwarz agreement is being pursued in order to create a larger, more competitive drug company. Stephen Pope, the head of equity research at Cantor Fitzgerald in London, says the deal is part of a trend toward consolidation in Europe's "atomized" midsized drug sector. Small players, especially family-owned firms such as Schwarz and Serono, are finding it difficult to acquire new products. According to Pope, the UCB deal is expected to net $383 million in synergy-derived annual savings, money that will bolster the combined firm's ability to develop its drug pipeline. "The world will belong to players with a complete competitive edge or deep pockets," he says.—RICK MULLIN
Burke, deputy secretary and chief operating officer of the Smithsonian Institution and chair of the committee. "Staff and resources devoted to preapproval functions are substantially greater." The committee called on Congress to appropriate major increases in funding and personnel for FDA. The panel says the additional funding should come from general revenues, not from user fees, which are paid by industry. In response to the IOM report, acting FDA Commissioner Andrew von Eschenbach says: "Much progress and reform of FDA's safety oversight enterprise are already under way. For example, FDA is developing new tools for communicating safety information to patients." The Pharmaceutical Research & Manufacturers of America says it does not see the need for a major FDA overhaul and believes FDA's drug safety system is basically s o u n d . —BETTE HILEMAN
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