28 November 2006 17:05 [Source: ICIS news]
LONDON (ICIS news)--Akzo Nobel said on Tuesday that it still plans to spin off pharmaceutical business Organon in an initial public offering (IPO) despite Pfizer pulling out of the joint development of schizophrenia drug asenapine.
The company said it would continue the development of asenapine following positive trials and would look to an IPO in early 2007.
Pfizer’s decision was an outcome of a commercial analysis of the compound and it will return all product rights, intellectual property and data to Organon and make orderly transitions in 2007, Akzo Nobel said in a statement.
UBS analysts said in a note to clients that the change of circumstances would better suit a trade sale than an IPO, even though it would raise less capital to re-invest in chemicals and coatings.
“We believe the original choice of an IPO was partly due to a change of control clause in the deal with Pfizer on asenapine, which gave Pfizer the right to buy the other 50% in asenapine if Organon changed ownership,” said the UBS analysts.
“However, now that Pfizer has discontinued its collaboration with Akzo Nobel, it opens up the possibility for a trade sale,” they added.
UBS said the company could be planning a duel IPO/trade sale but would not inform the market as it would complicate the IPO process.
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