Source: Bloomberg Online
Abbott Laboratories is close to an agreement to buy Solvay SA’spharmaceutical unit for about 4.8 billion euros ($7.1 billion) to get full control of the TriCor cholesterol pill, according to three people with knowledge of the situation.
An agreement may be announced as soon as tomorrow, said the people, who declined to comment publicly because the talks are private. Nycomed A/S, of Switzerland, and Takeda Pharmaceutical Co., of Japan, also contended to buy the unit, the people said.
Buying Solvay’s drug business would be a change of course for Abbott Chief Executive Officer Miles White, who has been acquiring medical devices and eye products to reduce reliance on medicines. Abbott is battling generic competition to its anti- seizure treatment Depakote and risks losing sales of the arthritis drug Humira — the company’s biggest product with $4.5 billion in revenue last year — as consumers cut spending.
The purchase price includes 4.5 billion euros in cash, with up to 300 million euros in contingent payments between 2011 and 2013, said a person with knowledge of the situation. The milestones relate to whether products perform well, the person said. The deal also may include other costs, this person said.
TriCor Co-Promotion
Abbott, of Abbott Park, Illinois, and Brussels-based Solvay co-promote TriCor, which generated $1.34 billion in revenue last year for Abbott and 511 million euros for Solvay. The companies also work jointly on TriLipix, a cholesterol treatment introduced this year. The Brussels-based maker of pharmaceuticals, chemicals and plastics has been weighing an initial public offering or sale of its drug unit since April.
Erik De Leye, a spokesman for Solvay, and Melissa Brotz, an Abbott spokeswoman, declined to comment in telephone interviews today.
Solvay, which introduced one of the first modern antidepressants in 1983, ranks as the world’s biggest producer of soda ash, used to make glass and modify the acidity of shampoos. The company gets much of its annual revenue from the automotive and construction industries, among the hardest hit by the recession.
The drug business produced revenue of 2.7 billion euros last year, or 28 percent of Solvay’s total sales. The company focuses on two therapeutic areas — cardiometabolics, which includes its best-selling product Tricor, and neuroscience, including the Duodopa treatment for Parkinson’s disease.
Top-Selling Products
TriCor, known chemically as fenofibrate, is used to reduce triglycerides and adjust cholesterol levels. Solvay’s other top- selling products are Androgel, a testosterone gel, and Creon, a pancreatic enzyme to treat cystic fibrosis.
Solvay, founded by the Belgian family of the same name, said in April it was considering options for the drug unit amid a wave of acquisitions in the industry. The possibilities included selling it to another company, forming a partnership, keeping the operation or selling shares in an initial public offering.
Abbott rose 39 cents, or 0.8 percent, to $47.33 in New York Stock Exchange composite trading on Sept. 25. Solvay fell 1.17 euros, or 1.5 percent, to 74.73 euros in Brussels trading.
Nycomed, whose owners include Nordic Capital and a buyout unit of Credit Suisse Group AG, offered 4 billion euros to 4.5 billion euros for the Solvay unit, people familiar with the situation said on Sept. 25. Nycomed wanted to buy the business to expand in preparation for an initial public offering in 2011, a person with knowledge of the matter said on Sept. 11.
Authors: Albertina Torsoli and Jacqueline Simmons
Date: 27-09-2009
Source Location: http://www.bloomberg.com/apps/news?pid=20601087&sid=a0FL48DrJ_fM
