Novartis, Crucell Vie For Switzerland's Berna

Vaccines

Already in the process of buying the U.S. vaccine producer Chiron, Novartis has stepped up its pursuit of the vaccine business even further, saying last month that it is considering making a cash offer to acquire Switzerland's Berna Biotech.

Novartis' revelation throws a wrench in the plans of the much smaller Crucell, a Dutch biotech company that early in December announced plans to acquire Berna in a share exchange worth about $450 million. While Berna's board recommended the Crucell deal, it subsequently granted due diligence to Novartis so it could make an offer as well.

Both firms are interested in Berna's technology platform and its marketed vaccines for influenza, hepatitis B, and other ailments. The company had 2004 sales of about $155 million and employs some 700 people.

Switzerland-based Novartis says it would combine Berna with Chiron to create a vaccine business with a wide geographic and product range. It also touts continued Swiss ownership "of an increasingly important health care business with public health responsibilities."

Crucell, which is developing several vaccines of its own, says its offer would create the leading independent vaccine company. It vows that the deal, already being "constructively planned," would preserve Berna's identity and its Swiss vaccine experience.

Meanwhile, ValueAct Capital, owner of 5% of Chiron shares, is urging Chiron shareholders to vote against the Novartis acquisition, calling the $45-per-share offer "tantamount to stealing the company." Novartis, which owns 44% of Chiron shares, says the price is fair and that it intends to complete the deal.