After passing on Kos Pharmaceuticals and eyeing Sepracor, Schering-Plough’s Hassan says he became very excited about Organon, even though Pfizer last fall returned to the Dutch company the rights to asenapine, a schizophrenia drug, following mixed results in clinical trials.

”We’ve seen this many times before, where very valuable pharmaceutical assets are not very visible … in a chemical company umbrella,” the affable ceo says. ”We were closely watching this and once we saw (Akzo’s) fourth-quarter results … being quite good, and also the asenapine situation get brighter, we obviously thought the moment was right…In a consolidating industry, there are very, very, very few companies left which have strong research … and a strong pipeline of late projects and new projects that have a long patent life.”

He also finds appealing the Intervet unit, which makes animal vaccines and provides a way to manufacture biologics. “The biologic capacity is very, very helpful to us,” says Fred. “This is a very valuable part of the asset valuation.”

Wall Street reaction was somewhat less enthusiastic. The outlook for the schizophrenia treatment remains unclear and Organon’s pipeline looks to have drugs for insomnia, menopause and contraception with only modest potential. Tim Anderson of Prudential Equity says the deal lacks “pizzazz…. and falls short of being highly complementary to the most important franchises such as cholesterol products Vytorin and Zetia.”

Barbara Ryan of Deutsche Bank was slightly more forgiving. She sees less reliance on the cholesterol products as a good move, but doesn’t view this as “a compelling acquisition.”

Bloomberg News;
Associated Press.

[tags]Fred Hassan, Organon, Schering-Plough[/tags]