Schering continues push into radiopharmaceuticals

Firm moves to acquire majority stake in French supplier

Schering continues its hot pursuit of radiopharmaceutical market share. Only weeks after announcing its intent to purchase peptide imaging agent developer Diatide (SCAN 9/29/99), the German firm took steps toward purchase of a major stake in French radiopharmaceutical company ORIS/CIS Bio International. Terms of the agreement were not disclosed.

Schering announced earlier this month that it had issued a letter of intent to CEA-Industrie of France to acquire a major stake in the company’s subsidiary, ORIS/CIS Bio International, which supplies radiopharmaceuticals to Europe, Japan, and the U.S. Established in 1993, CEA-Industrie belongs to the French atomic energy commission CEA (Commissariat a l’Energie Atomique) and is a holding company that manages CEA’s industrial interests, including 250 companies involved in atomic fuels, plants, and equipment; nuclear propulsion; radioactive waste management; and nuclear warhead production, as well as biomedical technology.

As Schering pursues its goal of penetrating the radiopharmaceuticals market, CIS Bio is attractive on many levels, according to Wendy Neininger, director of corporate communications for Schering Berlin and Berlex, Schering Berlin’s U.S. pharmaceutical subsidiary. CIS Bio sells Princeton, NJ-based Cytogen’s bone cancer therapeutic agent Quadramet in Europe, while Schering obtained rights to manufacture and sell the product in North and South America last October (SCAN 11/11/98).

But more importantly, CIS Bio boasts a strong sales organization and distributor network in Europe, with a presence in the U.S. and Japan, as well as expertise in developing, producing, and marketing radiopharmaceuticals, according to Schering executives. The CIS Bio purchase will complement Schering’s Diatide acquisition, according to the company: Diatide’s rich intellectual property portfolio combined with CIS Bio’s strong sales organization and distributor network could help Schering toward its goal of becoming a key player in the radiopharmaceuticals market.

Schering has been steadily building its radiopharmaceutical capability since early this year. In March, it entered into a licensing agreement with biopharmaceutical company Techniclone of Tustin, CA. The agreement granted Schering worldwide marketing and distribution rights to Oncolym, a radiolabeled monoclonal antibody (now in phase II/III clinical trials) for the treatment of intermediate- and high-grade non-Hodgkin’s B-cell lymphoma, and Schering agreed to pay Techniclone up to $20 million cash in the form of milestone payments and capital costs, including a $3 million cash up-front fee. Schering AG also agreed to take on 80% of the costs for existing clinical trials and pay a royalty to Techniclone on its worldwide sales of Oncolym.

In June, Schering forged a licensing agreement valued at approximately $47.5 million with San Diego, CA-based IDEC Pharmaceuticals that gave Schering exclusive marketing and distribution rights to Zevalin, another monoclonal antibody agent, now in phase III clinical trials, for treatment of low-grade and/or follicular non-Hodgkin’s B-cell lymphoma.

As for the Diatide deal, Schering expects it to close by the end of this month, Neininger said. The company remains open to other potential alliances in the radiopharmaceutical market as well.

“We want to add to our portfolio, and bring (radiopharmaceutical technology) in-house to accelerate our development process,” Neininger said. “Clearly we wouldn’t walk away from other opportunities.”