UK drug giant GlaxoSmithKline is reportedly considering whether to make an offer for Europe’s largest biotech, Switzerland-based Serono, which put itself on the market towards the end of last year.
According to the Financial Times, GSK executives are mulling over a proposal drawn up and dished out by investment bank Goldman Sachs for the 62% stake in Serono belonging to the family of its chief executive, Ernesto Bertarelli. A spokesperson for GSK was not available to confirm or deny this rumour.
Industry observers are also expecting to see bids from other pharmaceutical heavyweights such as Novartis, the current favourite, Pfizer, Johnson & Johnson and Sanofi-Aventis, although none have officially confirmed their interest.
Any purchase of Serono, which makes the multiple sclerosis treatment Rebif (interferon beta-1a), would have an estimated value of around $13 billion, and could be a tempting move to many of its larger peers, which would gain several biotechnology drugs as well as production muscle from the buy.
Investors in the Swiss biotech are certainly enthusiastic about the move - shares have climbed steadily since the company put itself up for sale last November. And, on January 10, Serono stock got a further 2.4% boost, closing at 21.02 on the New York Stock Exchange, after Novartis declined to put in an offer for vaccine maker Berna Biotech AG, fuelling speculation that its interest lies elsewhere.
Manufacturing problems persist
Meanwhile, production problems at GSK’s site in Puerto Rico, which first came to light early last year and led to the signing of a consent decree (an agreement between two parties that is sanctioned by a court) with the US Food and Drug Administration to rectify the issues, are still causing the firm a headache.
Shortages for some of its medicines, such as the heart disease therapy Coreg (carvedilol), diabetes drug Avandamet (rosiglitazone and metformin) and the antidepressant Paxil CR (paroxetine), have occurred because new documentation procedures, in place because of the consent degree, have created a bottleneck for getting drugs onto pharmacy shelves, according to media reports.
A spokesperson for the company, Nancy Pekerak, told Reuters that “every effort is being taken to keep the shortages from affecting patients,” and that GSK is expecting it to be a short-term issue.