Friday, June 06, 2008

Actelion - the sharks are circling

Big drugmakers want to do a deal with Switzerland's Actelion Ltd -- the question is will it be a $1 billion-plus drug marketing alliance or a $7 billion-plus takeover?

Actelion's experimental sleeping pill almorexant, the first in a new class of medicines for insomnia, is an enticing prospect for many large drug companies looking to improve their weak pipelines by buying in products.

The Swiss biotech has said that seven of the world's top 10 drugmakers have discussed partnering the medicine, but analysts, bankers and investors believe the talks could lead to more.

"Partnering discussions could also result in a bid for Actelion from any of the parties potentially interested in almorexant," said Goldman Sachs analyst Stephen McGarry.

Leading names in the frame include Novartis AG and GlaxoSmithKline Plc, both of whom have declined comment.

With a market value of $6.75 billion, Actelion would be a mid-sized bite for big pharma groups, which have become increasingly active in buying up biotech businesses as well as licensing drugs.
It also boasts an established $1 billion-a-year drug called Tracleer for a rare heart and lung disorder, which -- unusually -- has not been licensed to any other company.

Actelion's founding management and its loyal Swiss shareholders, however, may not be in the mood to sell.

"If it were a U.S. company, I would think almost certainly it would be taken out," said one healthcare banker.

"But given that it is Swiss and it is really the one European success story in biotech, it is not a certain thing. This may well end up as just a product deal."

More at Reuters

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