<<We know that the LKST munch is what actually set the sector right, not genomics.>>
Genomics! What genomics?
M&A at all level. That's what sector need. Dump craps and push forward what has chance.
Miljenko
PS: Serono appears bit hungry lately!
UPDATE 3-Serono eyes $2 bln buy as sales disappoint
TUESDAY, JANUARY 23, 2001 11:24:00 AM EST
(Adds new analyst comment, para 8-9, closing shares, para 12)
By Ben Hirschler, European pharmaceuticals correspondent
LONDON, Jan 23 (Reuters) - Swiss-based Serono SA, Europe's biggest biotechnology company, said on Tuesday it aimed to make an acquisition of up to $2 billion this year to broaden its drug lineup, as 2000 sales disappointed investors.
Chief Financial Officer, Jacques Theurillat, speaking after a reported 15.2 percent rise in 2000 sales in local currency terms, said Serono was looking to spend between $500 million and $2 billion.
"The biotech market has slowed down a bit and I think cash-rich companies will now be in a better position to grab the best opportunities -- and most probably this year we will be doing something," he told Reuters in a telephone interview.
"We watch very carefully the American market. However, we don't rule out an acquisition in Europe and especially the UK."
Serono has a war-chest of some $1.3 billion, following a share offer which raised $1 billion for the company last July.
Analysts and investors said a big acquisition would reduce dependence on best-selling multiple sclerosis drug Rebif, which accounted for 22 percent of sales in 2000.
"They really need access to new products to reduce reliance on Rebif and now is a good time to do a deal in biotech because stock prices have fallen," said one Swiss fund manager who owns Serono shares.
Sam Williams, biotech analyst at Robertson Stephens, said Rebif -- which virtually doubled sales in 2000 -- could not hold up growth for the whole company, with other products slowing.
"As a result, we see pretty modest earnings growth over the next two or three years of about 10 percent," he said. "They need to do something quite significant, which means an acquisition, but they will be pushed to find a good late-stage product opportunity for $1.5-2.0 billion."
SHARES HIT 11-MONTH LOW
Last year's sales totalled $1.147 billion -- undershooting analyst forecasts of around $1.18 billion. Theurillat predicted 2001 would be another year of double-digit growth.
"The figures are a bit light, mainly in the infertility area ... It's below the range the company themselves were targeting back in December of $1.15-1.18 billion," said Susan Haylock of Deutsche Bank, who rates the stock "market perform".
Shares in Serono, which hit a peak of 2,160 Swiss francs last August, ended 10 percent lower at 1,150 after touching 1,141 -- their lowest in 11 months. Worries about future sales have wiped one third off the value of the stock this month.
Theurillat said the 2000 results had been hit by adverse currency effects of $67.3 million, due to the weakness of European currencies against the dollar. Fourth-quarter sales alone rose by 11.6 percent in local currencies to $300.3 million.
Full-year sales of Rebif, an interferon treatment for multiple sclerosis, totalled $254.2 million, 95 percent up on the 1999 level, while sales of fertility treatment drug Gonal-F rose 12.3 percent in local currencies to $365.9 million.
Serostim, to combat physical wasting due to AIDS, totalled $137.1 million for the full year, compared with $137.4 million in 1999.
Serostim sales have been hit by a tougher reimbursement climate in the United States, resulting in a clamp-down on off-label use of the drug. Theurillat said there were signs that reimbursement conditions were improving and he predicted sales would grow by 5-10 percent in 2001.
HEAD-TO-HEAD TRIAL
Analysts said near-term prospects for the group remained dependent on Rebif, which is selling well in Europe but has yet to gain a foothold in the U.S.
Serono hopes to bring forward a U.S. launch of the multiple sclerosis drug by a year but whether it succeeds will depend on the outcome of a head-to-head clinical trial with rival Biogen BGEN, data from which is expected in the third quarter of 2001.
Serono will have to convince U.S. regulators that Rebif is safer or more effective than Biogen's Avonex if it is to accelerate a launch that would otherwise come after mid-2003.
Theurillat said Serono was continuing to increase the proportion of its medicines made using recombinant DNA technology, increasing the margins of the business. The percentage should rise to 80 percent by the end of 2001 from 75 percent at end-2000, he said.
In the past, Serono's hormone drugs were extracted from urine.
Rtr 11:24 01-23-01
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Copyright 2001, Reuters News Service |
