05 September 1994 00:00 [Source: ICB]
ROCHE HOLDING IS set to take the number four slot in the world pharmaceutical sales league following an announcement that it is making a $5.3bn agreed cash bid for the US drugs company Syntex.
The tender, which was expected to commence this week with an agreed bid at $24/share, should also boost Roche's ranking in the US drugs market from fifteenth to sixth.
Analysts say that the merger echoes the increasing pressures facing drug companies to increase their product portfolios and also highlights the added pressures of rationalising operations and introducing improving economics. Most say that Roche is not paying over the odds for Syntex and it will give it a more critical size in the tough US market. They expect the deal to offer gains by 1996-97.
Commenting on the deal, Roche chairman and ceo Fritz Gerber said 'innovative products and critical mass development, marketing and sales are key to success in today's competitive environment'. And he now remains certain that 'Syntex's substantial ethical business and its leadership in the areas of pain and inflammation would ideally complement the pharma portfolio of Roche'.
Syntex develops, manufactures and markets prescription pharmaceutical products, animal health and medical diagnostics systems. Leading pharmaceutical products include the anti-inflammatory treatments Naprosyn (naproxen) and Toradol (keterolac).
It also launched its own generic version of the anti-inflammatory naproxen last year, which has contributed to its market value diving by over $8bn since early 1992 as it faced the expiry of patents on the drug and the absence of new products to replace it.
Other main products include medicines to treat allergies, cardiovascular and cerebrovascular diseases. On the back of investing 19% of sales into R&D, Syntex also has compounds for the prevention and treatment of organ transplant rejection and Alzheimer's disease in clinical trials. The group's total worldwide sales last year were $2.1bn, of which 70% were in the US.
For Syntex the move comes after 'many months of intensively studying the healthcare environment, evaluating the increasingly competitive market place, and analysing our current and future prescription pharmaceutical product line', explained the group's chairman and ceo Paul Freiman who adds that 'given the speed of changes in the industry and a radically different competitive situation, we ultimately felt the need to align with a strong global partner'.
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