Squibb weighs realignment options

July 27, 1994

Executives at contrast supplierSquibb Diagnostics are looking into expanding their relationshipwith Bracco Industria Chimica SPA of Milan, Italy. One optionunder discussion is the sale of Squibb Diagnostics to Bracco. "We've been in discussions

Executives at contrast supplierSquibb Diagnostics are looking into expanding their relationshipwith Bracco Industria Chimica SPA of Milan, Italy. One optionunder discussion is the sale of Squibb Diagnostics to Bracco.

"We've been in discussions with Bracco over a varietyof different options for our business, so I wouldn't want youto think that it's just limited to a possible sale," saidPeggy Ballman, a corporate spokesperson for Squibb Diagnostics.

Ballman emphasized that no final decisions have been made.She refused further comment, stating that the discussions arean evolving process. This process, she says, includes an evaluationof the diagnostics business begun in January as part of an overallcorporate restructuring.

Squibb Diagnostics is part of Bristol-Myers Squibb's pharmaceuticalgroup, which bought Squibb in 1989 (SCAN 8/16/89). Bristol-MyersSquibb, of Princeton, NJ, underwent a restructuring earlier thisyear with the goal of eliminating 3000 employees from the pharmaceuticalgroup in two years.

The sale of Squibb to Bracco would echo Eastman Kodak's saleof its Sterling Winthrop unit, the diagnostics portion of whichwas picked up by Norway's Hafslund Nycomed (SCAN 7/14/94). Indeed,in news articles about the Sterling Winthrop sale, Squibb wasmentioned as another possible divestiture candidate as the pharmaceuticalindustry realigns.

Bracco is a long-time partner with Squibb in the developmentof medical imaging agents and is the supplier of raw materialfor the contrast agent Isovue. This agent is licensed by SquibbDiagnostics from Bracco.

Extending its relationship with or acquiring Squibb Diagnosticscould provide access for the Italian firm to virtually the entireAmerican market for medical imaging agents. Squibb Diagnosticshas an extensive sales force comprised of account management,national accounts and reimbursement and technical specialists,who sell and support a wide range of contrast media, MRI agentsand radiopharmaceuticals.