Pharmaceutical shuffle
As the pharmaceutical industry concentrates, the players are eager to be holding the right cards. To that end, they have been busy buying and selling divisions. It's clear that survival will depend on being a global leader in specific areas, rather than a scattershot player. Keeping up in the high-risk world of patented prescription drugs is getting harder and harder, so some firms are opting for the more open OTC (non-prescription) and generic (non-patented prescription) drug markets.
Bayer and Roche
German Bayer AG, which has had its problems over the last few years, is in final negotiations to buy Swiss Roche Holdings' over-the-counter drug business for around $1.9 billion. The deal has not yet been finalized.
Bayer is already a considerable player in the OTC market. Its brands include Bayer, Vanquish, and Aleve (pain relief), Bronkaid (asthma), Neo-Synephrine and NaSal (allergies), Alka-Seltzer, Pepto-Bismol, Talcid, and Lefax (antacid), One-A-Day and Flintstones (vitamins), Bactine (antiseptics), Midol and Mycelex (gynecological), RID (hair lice), Campo-Phenique, Canesten, and Domeboto (skin care), and Fergon (minerals),
Roche's OTC products include Bepanthen and Bepanthol (skin care), Priorin and Golden Millet (hair care), Gyn-Hydralin and Vagitrol (gynecological), Oceral (athlete's foot), Supradyn, Berocca, Rexodon, and Elevit (vitamins and minerals), Rennie (antacid). These are sold outside the US mostly.
Roche is reportedly interested in emphasizing the prescription drug market, concentrating on oncology.
Novaris (Sandoz) and AstraZeneca
Novartis, after losing out to Sanofi in an attempt to buy Aventis, had already struck once, by buying Canadian firm Sabex, a generic drug maker.
Now Novartis, through its Sandoz subsidiary, has acquired Durascan, a Danish subsidiary of AstraZeneca. Durascan is has a portfolio of generic medicines that are used widely in Scandinavia. Its generics include antibiotics, antirheumatics, cardiac therapeutics and psychotropics. The move boosts Novartis's presence in Scandinavia and also increases its presence in the growing generics market, which is still quite fragmented but is estimated to reach $80 billion by 2008. Sandoz/Novartis is now #2 in generics, with a 10% share. Israeli Teva has 11.3% of the market.
In eralier moves, Sandoz bought Slovakian company Lek, a major generic drug maker, last year for over $800 million. Teva, earlier this year, completed the acquisition of US generic drug maker Sicor, in a $3.4 million deal. More generic deals seem inevitable, as the roll up of the industry is well underway.
