NEWS OF THE WEEK ACQUISITION mcuw ί^' 5
NATRfCOR (nesintide; for Injection
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NEWCOMER Launched in September 2001, Scios' drug Natrecor was the first new treatment for congestive heart failure in a decade.
JOHNSON & JOHNSON TO BUY SCIOS Major health care company again seeks growth prospects in biotech
J
OHNSON & JOHNSON HAS
agreed to pay about $2.4 bil lion in cash to acquire Scios, an unprofitable biotechnology firm with one product on the market. The deal-J&J's fifth biotech purchase in as many years—fits a company pattern of acquisitions that deliver a needed boost to both its drug sales and its development pipeline. The Scios purchase "strength ens our position as a preeminent player in the biopharmaceutical industry," says Christine Poon, worldwide chairman of J&JHs
pharmaceuticals group. "It's where we see the most promise for innovative products to provide significant advances in the treat ment of unmet medical needs." Scios launched its first prod uct, the recombinant protein Natrecor, in 2001. The two com panies anticipate that J&J's sales and R&D muscle will expand the market for the drug many times beyond an anticipated $180 mil lion in 2003. In addition, J&J considers Scios' program to de velop small-molecule inhibitors ofp-38 kinases to treat inflamma
BUSINESS
ROCHE, DSM INK DOWNSIZED DEAL Swiss firm sheds vitamins business, bolsters diagnostics with acquisition
R THE PUMP Roche takes a high-tech health care track with insulin pump maker.
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OCHE LAST WEEK SIGNED A
contract for the sale of its vitamins, carotenoids, and fine chemicals business to DSM for $2.1 billion, down from the $2.3 billion agreed on when aproposed sale was announced in September. Roche blamed the price decline on the continued economic slow down and weakening of the dollar
C & E N / F E B R U A R Y 17. 2 0 0 3
compared with the Swiss franc. The company says it will take a charge of $1.2 billion against 2002 earnings to account for the difference between the selling price and the unit's book value. Roche will maintain liability for vitamin price-fixing lawsuits pend ing in the U.S., Europe, and else where. The company is increasing its 2002 provisions for price-fix ing settlements by $418 million to $1.3 billion. Also last week, Roche an nounced plans to acquire Disetronic, the world's second largest manufacturer of insulin pumps for diabetics, in a cash and stock deal valued at $1.2 billion. Roche
tion to be even more promising. However, Natrecor's prospects may be challenged if its safety is questioned in a soon-to-bereleased interpretation of clini cal data by a physician who, Scios says, was not involved in the Natrecor trials. Poon saysJ&J has "studied the issue very closely" and "concurs with FDA," which recommended approval without any cautions related to mortality. Keeping withJ&J's decentral ized business model, Scios will retain its name, identity, and man agement. The 22-year-old firm is based in Sunnyvale, Calif, and employs about 500 people; the acquisition is not expected to result in cutbacks. Scios shareholders, who must still approve the deal, are to receive $45 per share. The day before the deal was announced, the com pany's stock price jumped nearly 22%, to more than $42 per share, on merger rumors.—ANN THAYER is already the world leader in dia betes glucose meters. Diagnostic devices account for a third of Roche's revenue. A spokesman says the company hopes to develop the U.S. market for Disetronic's D-Tron Plus insulin pump—Disetronic holds a 70% share of the European market for insulin pumps but only 17% of the U.S. market. The acquisition of Disetronic would also bring Roche a major R&D center with a staff of 800 in Burgdorf, Switzerland. Roche and Disetronic are currently col laborating on an "automated pancreas," an internal device that measures and regulates glucose levels. Roche CEO Franz B. Humer says the exit from vitamins and the acquisition of Disetronic will help his company focus on what he calls its "two high-tech pillars" of pharmaceuticals and diagnos tics. He says the firm will con tinue to fend offpersistent acqui sition overtures from its Swiss neighbor Novartis.-RICK MULLIN HTTP://WWW.CEN-ONLINE.ORG
