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Deal continues Schering’s push into nuclear medicineThe radiopharmaceutical industry underwent some consolidation this month with the announcement that Schering AG’s management holding company, Schering Berlin, and its acquisition arm,
Deal continues Scherings push into nuclear medicine
The radiopharmaceutical industry underwent some consolidation this month with the announcement that Schering AGs management holding company, Schering Berlin, and its acquisition arm, BXA Acquisition, have agreed to purchase peptide imaging agent developer Diatide in a cash tender transaction. Schering and Diatide expect the approximately $130 million deal to close in late October, pending customary approvals.
A deal is attractive for both companies. Once completed, Diatide will gain marketing muscle and financial support for its products under research and development, while Schering will gain Diatides expertise in the area of peptide-based radiopharmaceutical development.
Earlier this year, Berlin-based Schering AG decided to increase its activities in the nuclear medicine market, which it believes carries research and development opportunities that fit its strengths in medical imaging and therapeutic products, according to Wendy Neininger, director of corporate communications for Schering Berlin and Berlex, Schering Berlins pharmaceutical subsidiary. Last October, Berlex signed an exclusive license agreement with Cytogen of Princeton, NJ, for the manufacture and sale of Quadramet, a bone cancer pain palliative agent, in North and South America (SCAN 11/11/98). Berlex began marketing Quadramet in March.
Diatide has a solid research pipeline, expertise to move products forward to development, and a strong patent portfolio, Neininger said. We see radiopharmaceuticals, especially therapeutics, as a growing market, and our expectation is that (Diatides products) will prove to be an important advancement in cancer diagnosis and treatment options.
Initially, Diatide was seeking piecemeal support for unpartnered products in its R&D pipeline, but after discussions with Schering, it became clear that Schering was interested in a more comprehensive agreement, according to Richard Dean, president of Diatide. Diatide will be integrated into Schering, and will remain in its Londonderry, NH, headquarters. Its 50 employees will be retained, and in fact, new R&D staff may be added, Dean said.
Our employee base is heavily weighted toward R&D, which is attractive to Schering, Dean said. Our researchers will offer their expertise, while Schering will give Diatide access to people and know-how that will help us bring our products to market.
Diatide was founded in 1990 to commercialize technology that links technetium radioisotopes to peptides, which home in on targeted receptors in the body (SCAN 6/30/93). Since then, the company has proven successful in forging alliances that have enabled it to continue its research and development. In 1995, Nycomed Amersham made a $10 million equity investment in the company (SCAN 8/30/95).
Although Nycomed has since divested its share in Diatide, it has supported Diatide with milestone payments for AcuTect and NeoTect, and the two firms maintain a copromotion marketing agreement in which Buckinghamshire, U.K.-based Nycomed markets AcuTect and NeoTect in the U.S. and has licensing rights to the products in Europe. AcuTect, targeted for imaging deep vein thrombosis, was cleared by the FDA in September 1998, while NeoTect, for lung imaging, was cleared in August (SCAN 8/18/99). Diatides U.S. and European agreements with Nycomed will remain intact through their terms, Dean said.
Diatide estimates that it has more than eight products under development, including diagnostic agents for infection, atherosclerosis, breast, prostate, and colorectal imaging, as well as therapeutic products such as NeoTide, a lung cancer therapy agent, for which Diatide hopes to apply for an investigational new drug exemption (IND) in fourth quarter 1999.
As part of the integration process, Schering plans to evaluate Diatides product line and prioritize the development of its products, according to Neininger.
Assuming the tender offer is successful, well evaluate Diatides overall portfolio and then move forward, she said.