Summary
In considering the outcome of the current bidding war, what can Solvay Pharmaceuticals offer to an acquirer ?
It can’t be the R & D pipeline. In 2004 Solvay was described by one industry observer as having a great pipeline. But except for one modest short-term success in the market, all of the projects then at Phase III or beyond fell down.
Analysis
Secondly, as previously discussed (Solvay Pharmaceuticals – prospects for a sale, www.glgroup.com/News April 6, 2009) Solvay’s existing products are too small to be of interest to a major pharmaceutical company. Abbott would avoid having to pay future remuneration on its own fenofibrate sales to Solvay, but Solvay’s own sales in this area are likely to tail off regardless.
As far as Nycomed is concerned, there is remarkably little synergy between the two organizations. Nor would acquiring Solvay Pharma particularly strengthen Nycomed in launching Daxas, its potential blockbuster for COPD now in registration. Indeed acquiring the Solvay division could divert attention from this key launch.
As far as UCB is concerned, there is certainly a good cultural fit, as both companies are Belgian. But it is not obvious that synergies at therapeutic area level would help UCB that much.
It is Japanese companies who would probably stand most to gain from acquiring Solvay Pharma. The Solvay division would bring infrastructure only a handful of them already possess in Europe and elsewhere. Therefore theoretically they should be making the higher bids. But whether any of them are able to get their acts together in time is another question.
John Ansell consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
