Industry update: Mergers and acquisitions
Glaxo Wellcome buys SmithKline Beecham
Pharmaceutical manufacturer Glaxo Wellcome will buy SmithKline Beecham, both of the United Kingdom, for an estimated $76 billion in stock swap. When complete, the merger (expected to be effective by this summer) will create the world’s largest drug company and make it the top seller of prescription drugs in the United States. The newly formed company will be known as Glaxo SmithKline and will have its corporate headquarters in London. Upon completion of the deal, Glaxo Wellcome shareholders will own 58.75% of the new company; SmithKline Beecham shareholders will own 41.25%. Additional information can be found at www.glaxowellcome.com.
Warner-Lambert, Pfizer agree to merge
In other pharmaceutical merger news, Warner-Lambert of Morris Plains, NJ, and Pfizer of New York have agreed to a $90 billion merger. Until recently, Warner-Lambert refused to even consider a bid from Pfizer, preferring instead to consider an offer from American Home Products of Madison, NJ. American Home Products’ sagging stock prices — now with only $57 billion to offer — may have caused Warner to change its mind. The new company formed between Pfizer and Warner-Lambert, to be called Pfizer Inc., will enjoy leadership in therapeutic areas including cardiovascular, lipid-lowering, central nervous system, and infectious diseases. Upon completion of the deal, Pfizer shareholders will own 61% of the company; Warner-Lambert shareholders will own 39%.
(Additional information on the merger can be found at the Web sites of the two current companies: http://www.warner-lambert.com/index. asp and http://www.pfizer.com/main.html.)
Warner Chilcott to acquire three brands
Warner Chilcott has signed an agreement to acquire three of Bristol-Meyers Squibb’s (Rock away, NJ) pharmaceutical brands. The products involved in the transaction currently produce $50 million in annual revenues and include these:
• Estrace (estradiol) vaginal cream, for estrogen replacement;
• Ovcon (norethindrone and ethinyl estradiol) 35 and 50, as oral contraceptives.
James G. Andress, chairman and CEO of Warner Chilcott, explains: "Our growth strategy is to maximize the value of our sales and marketing organization by developing, acquiring, and promoting specialty pharmaceutical products. We are acquiring Estrace cream and the Ovcon brands because they are proprietary products with solid growth prospects in the women’s health care market, which is our area of strategic focus and strength."
HGS, Praecis sign alliance agreement
Finally, Human Genome Sciences Inc. (HGS) in Rockville, MD, has signed an agreement with Praecis Pharmaceu ticals Inc. in Cambridge, MA. Says William A. Haseltine, PhD, chairman and CEO of HGS of the agreement, "We are pleased to form this alliance with Praecis, which combines HGS’ genomics-driven drug target discovery capabilities with Praecis’ small molecule lead identification and compound optimization skills."
Together, Human Genome Sciences and Praecis Pharmaceuticals seek to identify small-molecule drugs to fight metabolic disorders and infectious disease.
(Additional information on Human Genome Sciences can be found on the Web at www.hgsi. com.)