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Schering-Plough to buy Organon for 11 billion euros

Published on 21/03/07 at 10:02am

Schering-Plough is to buy Organon BioSciences by the end of this year, in an €11 billion cash deal.

The acquisition will give it access to central nervous system and women's healthcare products, as well as adding five Phase III projects to its pipeline.

Dutch group Akzo Nobel, which owns Organon, had originally planned to float the human and animal healthcare business, with an initial public offering (IPO) scheduled for the end of March. Bids from private equity bidders were rejected last month. The price includes €1.2bn of debt that Organon would have taken on to its balance sheet in the IPO.

Schering-Plough chief executive Fred Hassan said Organon's Phase III schizophrenia drug asenapine, a potential blockbuster, was crucial for the sale. Organon had a turnover of $3.4 billion in 2006 and has a portfolio including its gonadotropin Follistim/Puregon, a follicle-stimulating hormone which lags some way behind Merck Serono's market-leading Gonal-f (follitropin alfa) in the infertility field.

Other products include muscle relaxant Esmeron/Zemuron and contraception drugs NuvaRing and Implanon. Organon's Dutch manufacturing facility in Oss will now house Schering-Plough's global gynaecology and fertility activities, while Organon's neuroscience research will continue in Newhouse, Scotland.

Financed through a mixture of cash, debt and equity, the deal is described as an "excellent fit" by Hassan. Organon plans a €1.3bn share buy-back equivalent to 10% of outstanding shares when the deal closes.

Organon's animal healthcare business, Intervet, has sales of $1.5 billion and gives the company the potential to develop human vaccines, Hassan added.

Organon's Phase III compounds include:

·* Asenapine, a novel psychopharmacologic agent for patients with schizophrenia and acute mania bipolar disorder

* Sugammadex, for the reversal of neuromuscular blockade induced during surgical procedures

* NOMAC/E2, an oral contraceptive product containing nomegestrol acetate, a novel progesterone

* ORG36286, a follicle-stimulating hormone for infertility

* Esmirtazapine (ORG50081), for the treatment of insomnia

 

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