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Business

Serono Eyes Strategic Shake-up

by Patricia Short
November 14, 2005 | A version of this story appeared in Volume 83, Issue 46

Pharmaceuticals

Swiss biotechnology company Serono, which is 62% owned by the founding Bertarelli family, says it has retained investment firm Goldman Sachs to “explore various strategic alternatives.”

Serono isn't commenting further, but such an announcement usually implies that a company has decided to put itself up for sale. Indeed, press reports say Serono has talked with at least four major pharmaceutical companies about being acquired, a deal that could be worth up to $15 billion.

Industry observers point out, though, that Serono's move could indicate the opposite decision: that it is putting together an acquisition strategy of its own.

Serono's multiple sclerosis treatment, Rebif, accounted for 54% of its sales in the first three quarters of 2005. That relatively limited product slate—and a limited pipeline of new drugs, particularly in late-stage clinical development—may put off prospective buyers, some analysts conjecture. They suggest that Serono could instead embark on an acquisition-driven push to broaden its existing offerings or add new treatment areas.

Serono's move comes just two weeks after the family-held German drug and chemical maker Altana hired Goldman Sachs for a similar exercise for its pharmaceutical operations. Altana is committed to spinning off its chemical operations through an initial public offering on the German stock exchange next year.

However, the future is open with regard to the pharma division, says Altana CEO Nikolaus Schweickart. Pharmaceuticals, he says, will be strengthened through acquisitions. But “the pharmaceutical group's shareholder structure may undergo a change, because without such a change, a strategic alliance is hard to conceive,” he says.

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