January 20, 2007 / 10:52 AM / 13 years ago

UPDATE 4-Akzo, Pfizer scrap asenapine joint development

(Adds analyst comments, background, updates shares)

By Reed Stevenson and Harro ten Wolde

AMSTERDAM, Nov 28 (Reuters) - Dutch chemical group Akzo Nobel (AKZO.AS) and Pfizer (PFE.N) said on Tuesday they will no longer jointly develop asenapine, a schizophrenia treatment that was expected to bolster Akzo’s IPO plan for its drugs unit.

Akzo said that it remained fully committed to the initial public offering of its pharmaceuticals and veterinary units Organon and Intervet, but did not rule out the possibility of an outright sale of the business.

“With Pfizer out of asenapine, the poison pill for a trade sale is gone,” said Rabo Securities analyst Mark van der Geest.

A trade buyer could pay as much as 9 billion euros ($11.8 billion) for Organon, which would be a higher valuation than Akzo would get in an IPO, analysts have said.

Akzo Nobel shares fell as much as 2 percent on the Amsterdam bourse in early trade but regained some ground to trade at 42.21 euros at 1515 GMT, down 0.9 percent. The DJ Stoxx European chemicals index .SX4P was down 0.8 percent.

The two companies said Pfizer withdrew from the deal due to commercial considerations and Akzo said that the Organon BioSciences pharmaceuticals unit would continue to develop the drug alone.

Asenapine had been expected to become the first billion-dollar blockbuster drug for Organon BioSciences, which was expected to float by early 2007 with a valuation between 8 billion and 9 billion euros ($10.5-11.8 billion).

In October, Akzo said asenapine, the most promising drug in its pipeline, was showing mixed Phase III test results for schizophrenia treatment, an $11 billion market that is growing at least 10 percent annually.

The disappointing news wiped more than 1 billion euros from Akzo’s valuation and triggered concern that Pfizer would pull out of the deal.


Jan van den Bossche, an analyst with Petercam Securities, called the announcement a “typical Pfizer decision”.

“The largest pharma group in the world is desperately looking for multi-billion dollar drugs to replace its current blockbusters that are close to the end of patent protection,” Van den Bossche said in a client note.

Pfizer in several instances has returned product licences if drug developments disappointed. In June, it returned Neurocrine’s (NBIX.O) insomnia drug, Indiplon, and last year it pulled out of development of asthma drug Daxas with Germany’s Altana ALTG.DE.

“We are fully committed to the IPO process,” Organon President Toon Wilderbeek told reporters on a conference call, adding that the company would also consider finding a new development and marketing partner for asenapine.

Wilderbeek and other executives, however, did not explicitly rule out the possibility of a sale when pressed on the issue by reporters.

Van Lanschot Bankiers analyst Geert-Jan Hoppers said: “Now that Pfizer has exited the asenapine collaboration, Organon no longer has any major collaborations, in our view. This may imply a sale of Organon BioSciences has become easier.”

Keith Nichols, an Akzo Nobel senior vice president in charge of the IPO, confirmed that a Pfizer pullout would void a change-of-control clause in asenapine, which would allow it to sell Organon BioSciences outright rather than floating a minority shareholding in the pharmaceutical and veterinary unit.

Akzo Nobel said in a statement that Organon would assess whether further clinical trials were necessary for asenapine, and expected that final test results could be presented by May 2007.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below