The Weekly Pharma Merger Roundup

As you all know by now, Merck announced on Monday that it will purchase Schering Plough for $41.1billion in a deal constructed as a reverse merger.

By Clifford M on Mar 14, 2009

As you all know by now, Merck announced on Monday that it will purchase Schering Plough for $41.1billion in a deal constructed as a reverse merger. The reverse merger strategy was concocted to prevent the new company from losing the international sale rights to Remicade, Johnson and Johnsons lucrative, blockbuster rheumatoid arthritis drug. According to the original deal inked by Johnson and Johnson and Schering Plough, Schering would have to surrender its rights to Remicade which generated $2.1 billion in sales outside of the US last year and golimumab (which is pending approval in Europe) if current ownership of Schering changes. Golimumab (CNTO 148) is Johnson and Johnsons Centocor division next-generation human anti-TNF-alpha monoclonal antibody be developed as monthly subcutaneous treatment for adults with active forms of rheumatoid arthritis, psoriatic arthritis and ankylosing spondylitis. Since the merger was announced on Monday, Johnson and Johnson hasnt issued any public statements about the dealprompting some analysts to speculate that Johnson and Johnson may well make a counteroffer to acquire Schering Plough. Others believe that Johnson and Johnson will challenge the new companys international rights to Remicade and golimumab despite the great lengths that Merck and Schering Plough management went to structure the acquisition as a reverse merger. Stay tuned for updates.

In other merger news, US-based Gilead announced that it will acquire CV Therapeutics for about $1.4 billion. The deal tops the hostile takeover offer from Astellas Pharma of Japan. Gilead, an HIV drug manufacturer is purchasing CV Therapeuticswhich sells the cardiovascular drugs Ranexa (chronic angina) and Lexican (reduces stress during cardiovascular surgical procedures)to expand its therapeutic repertoire beyond virology. The stock prices of shares of Gilead and CV Therapeutics jumped after the announcement signaling Wall Streets approval of the deal. Nevertheless, it may be premature for Gilead and CV Therapeutics to begin celebratingAstellas may very well tender a counteroffer!

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