Ciba-Sandoz merger gets FTC's go-ahead - Ciba-Geigy AG; Sandoz AG

The proposed merger of Ciba-Geigy AG and Sandoz AG (both of Basel, Switzerland) into what will become the world's second-largest drug company has received the conditional approval of the Federal Trade Commission, pending completion of more than $1 billion in divestitures and licensing.

The new company, to be known as Novartis, is expected to come into being by the end of the first quarter. With more than $75 billion in combined capitalization and combined 1995 sales of some $20 billion in core business areas, Novartis will be second only to Glaxo Wellcome plc (London) on the world pharmaceutical stage.

Besides the divestiture of Sandoz's corn herbicide and flea/tick control businesses, the key FTC ruling involves licensing of gene therapy technology and patents to Rhone-Poulenc Rorer (RPR; Collegeville, Pennsylvania), so RPR can compete against Novartis in that market segment. William Baer, director of the FTC's Bureau of Competition, said the divestiture agreement insures that "there will be a second firm, just as there is today, with the bundle of intellectual property rights needed to develop these [gene therapy] products."

Meanwhile, in another move related to the upcoming merger, Ciba-Geigy has negotiated with Swiss tax authorities a tax-free deal for its chemicals business, which has annual sales of $5.2 billion. That spinoff has been classified as a demerger, so Ciba shareholders receiving shares in the chemicals business will pay neither income tax nor stamp duty. In addition, Ciba will not incur any corporate tax from the deal.

Acquisitions & agreements

Nellcor Puritan Bennett (Pleasanton, California) closed on its acquisition of Aequitron Medical (Minneapolis, Minnesota) in early December, following approval of the deal by Aequitron shareholders. The stock-for-stock transaction was valued at just over $60 million. Nellcor is a global leader in respiratory monitoring and therapy products, while Aequitron is a maker of electronic respiratory products.

American Medical Response (Aurora, Colorado), a leading provider of ambulance services, has completed its acquisition of STAT Healthcare Inc. (Houston, Texas), a provider of emergency physician and disease management services.

For more news of acquisitions and agreements, see Table 11 and Table 12.

Company sues FDA

Electromedical Products International (Mineral Wells, Texas) has sued the FDA in federal court in Washington, seeking to prevent the agency from blocking approval of the company's Alpha-Stim 100 cranial electrotherapy stimulator, which it seeks to move to over-the-counter status from its present clearance under physician prescription.

European business moves

Dornier Medizintechnik (Germering, Germany), best known for its lithotripsy systems, is setting up a joint company with Fritz Hofmann (Erlangen, Germany), which has its main strength in X-ray diagnostic systems. Dornier, which initially holds 49% of the new company, has the option to increase that to a majority holding this year.

Bio-Intermediair (Groningen, the Netherlands) has been acquired by Gist-Brocades (Delft, the Netherlands), a multinational producer of penicillin and other fermentation products. Gist-Brocades, which previously held 20% of Bio-Intermediair, has increased its holding to 93.4%, with the balance held by DSM Chemicals (Sittard, the Netherlands). The acquisition for about $23 million provides control of the second-largest European contract bioprocessing plant specializing in recombinant proteins. Bio-Intermediair is constructing a 70,000-square-foot production facility in Montreal, Canada.

Companies . . . in brief

Apria Healthcare Group (Costa Mesa, California) has paid Vitas Healthcare Corp. $4 million in a settlement over termination of the planned merger of the companies . . . Connective Therapeutics (Palo Alto, California), which is involved in the development of therapeutics products for rheumatology and dermatology, has raised $8 million through the sale of both common and preferred shares . . . Derma Sciences (Old Forge, Pennsylvania), makers of products for treatment of chronic, non-healing skin ulcerations, has restructured its marketing, sales, and administrative functions in an effort to reduce expenses . . . Gelman Sciences (Ann Arbor, Michigan) shareholders will meet Feb. 3 to vote on Gelman's proposed acquisition by Pall Corp. (East Hills, New York) . . . Innovex Inc. (Hopkins, Minnesota) directors voted a 2-for-1 stock split in the form of a 100% stock dividend, along with increasing the authorized number of shares by 100% to 30 million . . . Medical Technology & Innovations (Lancaster, Pennsylvania), maker of a hand-held device used for vision screening of young children, opens a European office in London this month . . . ThermoGenesis Corp. (Rancho Cordova, California), which is developing the CryoSeal surgical sealant system and the BioArchive placental blood collection system, has raised $8.3 million in a private placement of common shares and warrants.

Table 11

Acquisitions

* Coherent Inc. (Santa Clara, California) has acquired 80% of the outstanding shares of Tutcore Oy (Tampere, Finland), with an option to acquire the remaining shares in the future. Tutcore uses molecular beam epitaxy to grow aluminum-free epitaxial wafers, critical to the production of high-power semi-conductor laser diodes for medical, scientific and commercial uses. Coherent is the world market leader in the manufacture of such lasers.

* Colorado MedTech (Boulder, Colorado) plans to buy Novel Biomedical (Plymouth, Minnesota), a maker of disposable interventional medical devices, primarily catheters, used in angioplasty, minimally invasive surgery, electrophysiology and infertility.

* Conceptus Inc. (San Carlos, California) has completed its acquisition of Microgyn Inc., a maker of products used in hysteroscopy procedures.

* Gull Laboratories (Salt Lake City, Utah), a majority-owned subsidiary of Fresenius AG (Oberusel, Germany) plans to acquire the diagnostic business of the Fresenius Intensive Care and Diagnostics Division. The combination of the two diagnostics business units is expected to increase Gull Laboratories' global sales by about 40%.

* HBO & Co. (Atlanta, Georgia) has completed its acquisition of GMIS Inc. (Malvern, Pennsylvania), a provider of clinical information systems for the managed care industry.

* Immucore Inc. (Norcross, Georgia), a maker of blood bank laboratory reagent systems and related products, has acquired Dominion Biologicals Ltd. (Halifax, Canada), a maker of monoclonal antibody-based reagents, for about $8.5 million in cash, notes and warrants.

* Medarex Inc. (Annandale, New Jersey) plans to acquire Houston Biotechnology Inc. (The Woodlands, Texas), which is developing monoclonal antibody and other biopharmaceutical products to prevent secondary cataracts and treat glaucoma.

* The sale of Medex Inc. (Hilliard, Ohio) to Furon Co. (Laguna Nigel, California) was approved by Medex shareholders in mid-December.

* Societe Generale de Surveillance (Geneva, Switzerland) has acquired a majority stake in Melbourne Pathology (Melbourne, Australia), a leading provider of pathology services and biomedical tests.

* Steris Corp. (Mentor, Ohio) has completed its acquisition of Calgon Vestal Laboratories, a unit of Bristol-Myers Squibb's ConvaTec division (both Princeton, New Jersey), in a cash deal valued at about $75 million. Calgon is a leader in infection control and contamination control products for health care and surgical markets.

Source: Biomedical Business International

Table 12

Agreements

* Analogic Corp. (Peabody, Massachusetts) and Aurora Technology (Minneapolis, Minnesota) agreed to jointly market Aurora's X-ray diagnostic workstations and Analogic's Webrad medical image delivery system. Analogic has a similar agreement with DOME Imaging Systems (Waltham, Massachusetts), on imaging software products.

* Atrix Laboratories (Fort Collins, Colorado) has signed an agreement with Block Drug Co. (Jersey City, New Jersey), giving Block North American and certain European marketing rights to the first three Atrix products for treating periodontal disease. The first, the Atrisorb barrier for guided tissue regeneration (GTR), was approved by the FDA in March 1996, and is marketed in the U.S. and several international markets. The other two products involved in the agreement, which provides potential milestone payments of more than $50 million to Atrix, are the Atridox subgingival anti-infective treatment and a second-generation GTR barrier which will begin pivotal human clinical trials this year.

* Aurora Biosciences Corp. (La Jolla, California) and Carl Creative Systems (Harbor City, California) have formed a strategic alliance to develop sample-handling devices for rapid screening of compounds as potential new medicines.

* CompuMed Inc. (Manhattan Beach, California) and Varian Imaging Products, a division of Varian Associates (Palo Alto, California), have signed a technology development agreement covering CompuMed's use of Varian's amorphous silicon sensor array in a line of all-digital, X-ray bone densitometers. Varian Associates also announced that its Varian Biosynergy subsidiary had entered into a research agreement with the University of Arizona (Tucson, Arizona) to combine targeted energy with gene therapy in the search for new cancer cures. The initial research will be in the area of breast cancer.

* Laserscope (San Jose, California) has signed an agreement with Exim International Trading Co. (Orlando, Florida) under which Exim will market Laserscope's medical laser systems and related products in China.

* Premier Laser Systems (Irvine, California) and Refractive Surgical Services (Kansas City, Missouri) plan a joint venture to provide on-line ophthalmic analysis services.

* Siemens AG (Erlangen, Germany) and Elscint Ltd. (Tel Aviv, Israel) have signed a development and production agreement for certain assemblies for medical imaging computed tomography systems. The two companies will continue to market their CT systems separately.

Source: Biomedical Business International

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