Akzo Pharma's Fall and Rise
The recent meltdown at Akzo Nobel's Pharma unit was caused by a perfect storm of genericization, macroeconomic gloom, pipeline delays and product underperformance. But Akzo Pharma hopes that by beefing up R&D and cutting costs through restructuring, it can return to growth in 2005.
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In a bold move it says will bolster its late-stage pipeline and provide necessary scale in sales and biologics manufacturing, Schering-Plough Corp. is acquiring the CNS and women's health specialist Organon BioSciences from Dutch conglomerate Akzo Nobel for $14.4 billion. For the acquisition to be a success, SP will have to find value where others have not--specifically in Organon's Phase III schizophrenia treatment asenapine, which was handed back to the company by Pfizer after disappoinging clinical results.
Organon's biologics R&D push relects similar moves by other mid-sized firms, and could help the company recover after a series of setbacks. But building biotech from discovery upwards will take time.
Hard times at drug division Organon have forced Akzo Nobel to cut costs and restructure. As part of this effort, the Dutch conglomerate has implemented an aggressive partnering strategy to maximize the value of its late-stage pharma pipeline. Its potential $370 million pact with Pfizer for the Phase II/III antipsychotic asenapine marks an impressive start, and underscores Akzo's commitment to rebuilding Organon.