Radiotracer Firms Strengthen Alliance

January 19, 1994

Syncor International and Du Pont Merck Pharmaceutical are strengtheningtheir alliance in radiopharmaceutical distribution. The companiesrevised their supply and distribution arrangement and will transferDu Pont Merck's direct radiopharmaceutical sales

Syncor International and Du Pont Merck Pharmaceutical are strengtheningtheir alliance in radiopharmaceutical distribution. The companiesrevised their supply and distribution arrangement and will transferDu Pont Merck's direct radiopharmaceutical sales effort to Syncor.

Under the terms of the new arrangement, Syncor will distributethe radiopharmaceutical products that Du Pont Merck sells directin bulk form to over 2000 customers, primarily hospitals and clinics.Syncor will continue to serve as Du Pont Merck's primary commercialradiopharmacy distribution network for prepared unit dose productsand will maintain preferential distribution rights for a numberof Du Pont Merck's products.

As a result of the alliance, Du Pont Merck sales representativeswill forward bulk orders to Syncor for distribution. Prior tothe agreement, both Syncor and Du Pont Merck sales reps visitedradiopharmaceutical purchasers, with Du Pont Merck promoting bulksales and Syncor plugging prepared unit doses. Syncor representativeswill take orders for both options under the new agreement.

The agreement takes effect in February. It will replace a five-yeardistribution pact that began in 1988 (SCAN 4/27/88). Syncor isbased in Chatsworth, CA, while Du Pont Merck is headquarteredin North Billerica, MA.

The alliance is an attempt to capitalize on the movement towardhealth-care reform by enabling the companies to distribute productsto customers more cost-effectively, according to Syncor CEO GeneR. McGrevin.

"By combining Du Pont Merck's strengths in product developmentand manufacturing with Syncor's strengths in distribution andservices, both companies are taking a significant step to betterserve emerging health-care integrated delivery systems,"McGrevin said.

The addition of Du Pont Merck's direct customer base to Syncorwill increase Syncor's revenues by $50 million to $60 millionthis year and will add pre-tax profits of $2.5 million to $3.5million, according to the company. Syncor's prepared unit dosebusiness is expected to bring in $265 million for calendar year1994.

Syncor also announced that it is changing its fiscal year toend Dec. 31 rather than May 31, beginning with the seven monthsending Dec. 31, 1993. The change aligns Syncor's fiscal year endwith Du Pont Merck's.

Syncor distributes Du Pont Merck's cardiac SPECT agent, Cardiolite,as well as I.V. Persantine, a pharmacological stressor. Syncorexpects to distribute Neurolite, Du Pont Merck's technetium-99m-basedbrain imaging agent, when that product receives Food and DrugAdministration approval (SCAN 6/30/93).