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Altana snapped up

German firm's pharma unit bought by Danish rival Nycomed for Ä4.5bn

Consolidation in the European mid-tier pharmaceutical sector stepped up another notch as Danish firm, Nycomed, agreed to buy Altana's pharmaceutical unit for Ä4.5bn.

The sale of the unit, which has been on the market for several months, will create yet another significant European player with estimated annual sales of over Ä3bn. The merged firm will continue to operate under the Nycomed name with an administrative headquarters in Zurich and R&D facilities in Konstanz, Germany.

Nycomed CEO, Dr HÂkan Bjˆrklund, who will run the new company, told a press conference that Altana's pharmaceuticals business and the much smaller Nycomed were a ìperfect matchî.

ìIt's an acquisition in the sense that we are buying Altana's pharma division but it's also a merger in the sense that we will have to work with the Altana management and employees in order to make it a successful company,î he said.

When asked if there would be redundancies, he replied: ìWe are still in a very early stage. When you merge two companies, there are overlaps and of course we have to take the synergies out.î

Without an R&D function, up to now, Nycomed has made its name by sourcing new products through licensing agreements and providing specialist late-stage clinical development and marketing functions. It mainly sells secondary care products in Europe and GP and pharmacy medicines in selected markets, specialising in cardiology, surgery, osteoporosis and pain treatments.

The company has stressed that it intends to make use of Altana's R&D arm to move into early-stage development to take advantage of the growing number of biotechnology-derived NCEs coming through.

However, analysts are yet to be convinced of the potential of the new entity; with top-selling gastrointestinal drug, pantoprazole (sold as Protium in the UK), set to come off patent in 2009, Altana is perceived as having a weak pipeline. The two drug candidates in line to plug the gap left by pantoprazole, the corticosteroid, Alvesco and asthma and chronic obstructive pulmonary disease drug, Daxas, have both suffered recent regulatory setbacks.

Dr Bjˆrklund denied that the new firm would be dependent on pantoprazole: ìIt's a big product but only accounts for about 10 per cent of our turnover.î

Nycomed said the merger was due to close by December 29, pending approval by European and US antitrust authorities and a vote by Altana shareholders. Altana Pharma CEO, Dr. Hans-Joachim Lohrisch, has agreed to join the Nycomed board, which Dr Bjˆrklund said would smooth the integration process.

Nycomed has insisted that its development partnership for Alvesco with sanofi-aventis will not be impaired by the merger. Altana AG will continue to operate as a listed company specialising in chemicals.

Private investors Nordic Capital, Credit Suisse Private Equity and Blackstone own Nycomed. It was founded in Norway in 1874 by pharmacist, Morten Nyegaard, as an agent for imported pharmaceutical products.

30th September 2008

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