Decision On Intervet-Merial JV Coming In "A Few Weeks," Companies Say
03/04/2010 12:49PM
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Merck & Co. and Sanofi-Aventis SA will decide within a few weeks whether the pharmaceutical makers will combine their Intervet and Merial animal health units in a joint venture, company spokesmen said.
“Discussions are still ongoing” between the companies, Paul Geurts, a spokesman for Merck’s Intervet/Schering-Plough Animal Health, said March 3. “We expect a decision in the next few weeks.”
Sanofi Chief Executive Officer Chris Viehbacher previously said a decision on a joint venture was expected before the end of February, telling Bloomberg News Feb. 1 it was “more likely than not” the companies would proceed with a joint venture.
In Sanofi’s quarterly earnings statement Feb. 10, the Paris-based company said an Intervet-Merial combination was “highly probable.”
Spokesmen for Intervet, Merial and Sanofi declined to provide additional details.
In September, Sanofi bought Merck’s 50 percent stake in Merial, the companies’ previously-formed veterinary partnership, for $4 billion. New Jersey-based Merck sold the 50 percent stake to assure regulatory approval of its purchase of Schering-Plough, which closed Nov. 4.
The agreement included an option for Sanofi to combine Merial with Intervet within about 100 days after Merck completed the Schering-Plough purchase.
A Merck-Sanofi joint venture would signify further consolidation in animal health, with the number of companies in the industry shrinking in recent years in part because of rising costs to develop and gain government approval of drugs
A joint venture would also give Merck and Sanofi additional muscle against industry leader Pfizer Inc. in the $19 billion global market for vaccines, medicines and other products for livestock and pets.
“The combination would create a new leader” in the animal health business, Viehbacher said last year.
Merck and Sanofi’s animal health units generated a combined $4.77 billion in revenue in 2009. Merial, whose U.S. operations are based in Duluth, Ga., had $2.55 billion revenue in 2009, or almost 14 percent of the market.
New York-based Pfizer, with $2.76 billion in animal health sales last year, controls around 15 percent of the global market.
Merial’s products include Ivomec, Corid, for treatment of coccidiosis in cattle, and Reliant 4 vaccines, which protect against respiratory viruses and diarrhea. Intervet’s products include Revalor, Resflor Gold and Safe-Guard.
Source: Bruce Blythe, Vance Publishing