Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : Pharma News Only (pfe,mrk,wla, sgp, ahp, bmy, lly) -- Ignore unavailable to you. Want to Upgrade?

To: Anthony Wong who wrote (218)	6/5/1998 1:13:00 PM
From: Anthony Wong	Respond to of 1722

Merck Wins No Matter Outcome of Astra JV Restructure Talks June 05, 1998 12:25 PM By Jennifer Fron Mauer NEW YORK (Dow Jones)--Merck & Co. (MRK) is sitting in the catbird seat. Whether or not the pharmaceutical giant ends its U.S. joint venture with Sweden's Astra AB (A), analysts said, Merck will benefit. Earlier Friday both companies confirmed they are in talks to restructure the 16-year-old venture, called Astra Merck Inc., but neither would provide further details. However, there are reports that to ensure its future independence, Astra would be willing to give Merck up-front cash payments and future royalties that could total $10 billion. "It sounds like they (Astra) are willing to give them (Merck) so much money that they (Merck) will take it," said Alex Zisson, an analyst with Hambrecht & Quist. While Merck doesn't necessarily need the additional revenue, it wouldn't hurt. Analysts said the Whitehouse Station, N.J., company could use the money to fund its stock buyback program, to increase internal research and development efforts and to acquire licensing agreements for other companies' late-stage products. Merck faces the loss in 2000 and 2001 of patent protection for several blockbuster drugs - including Pepcid, for treating ulcers, and Vasotec, for controlling blood pressure - and could use a boost to its current pipeline. On the other hand, if the Astra Merck joint venture isn't restructured, Astra Merck retains the "perpetual" right of first refusal on U.S. rights to all new Astra drugs, analysts said. Though Astra's pipeline has been described as "lackluster," past drugs have performed well, and there is the hope that the future could be bright, too, analysts said. Prilosec became a blockbuster antiulcer drug. Losec, the ulcer treatment, has also been profitable. And Friday Astra Merck received approval to market Atacand for hypertension in the U.S. Atacand belongs to an important new class of antihypertensive drugs that is expected to become a leading class in the next decade, Astra said. NYSE-listed shares of Merck were up 3 3/8, or 2.9%, to 119 1/16 on composite volume of 1.7 million shares, compared with a daily average of 2.4 million. Just two weeks ago, Merck agreed to sell its stake in DuPont Merck Pharmaceutical Co. back to DuPont Co. (DD) for $2.6 billion because the joint venture wasn't contributing significantly to Merck's overall growth. But analysts said the two moves are more likely a coincidence of timing than the sign of a strategic change in attitude. "Merck has always been very aggressive in getting joint ventures," Zisson added. Indeed, the company has three others. Four years ago, Merck forged a lucrative joint venture with French vaccine maker Pasteur Merieux Connaught, a division of Rhone-Poulenc SA. Last year, Merck created the world's largest animal health and poultry-genetic company, called Merial, with Rhone-Poulenc. And in 1989, it linked with Johnson & Johnson (JNJ) to form Johnson & Johnson-Merck Consumer Pharmaceuticals Co. to market over the counter products. Hamant Shah, an independant analyst, said all three are quite lucrative for Merck, and that the company is unlikely to seek to end them any time soon. -By Jennifer Fron Mauer; 201-938-5287; jennifer-fron.mauer@cor.dowjones.com