Pharmaceutical makers Rhone-Poulenc Rorer Inc. and Hoechstcombined their plasma protein businesses into a joint venturecompany, called Centeon, that will spend as much as $80 million ayear on research and development projects, many of thembiotechnology-related.

The Centeon joint venture brings together plasma products, assetsand personnel from Hoechst subsidiary, Behringwerke AG, ofMarburg, Germany, and Rhone-Poulenc Rorer subsidiary, ArmourPharmaceutical Co., of Collegeville, Pa.

Centeon, headquartered in King of Prussia, Pa., will have annualrevenues of more than $1.2 billion, said Beth Leahy, vice president ofcommunications and public affairs.

The biggest selling products are plasma expanders used duringsurgery and for treatment of shock and burn victims, coagulationfactors for hemophilia, immunoglobulins and anti-blood clottingtreatments.

Leahy said Centeon's research and development expenditures, from"$60 million to $80 million a year," will double the amount spent byBehringwerke and Armour.

"We will be developing biotech products and alliances with biotechcompanies," Leahy added. Targeted research areas are recombinantblood clotting proteins for hemophilia and gene therapies forbleeding disorders.

In addition to developing its own drug candidates, Centeon, Leahysaid, will forge alliances with biotechnology companies, providingthem with clinical trial development, manufacturing and regulatoryexpertise in exchange for new drug candidates.

Leahy said Centeon will work with Rorer's gene therapy division,Gencell, but also will seek other collaborations. Gencell, formed in1994 by Rorer, is a network of 14 companies and institutionsheadquartered in Santa Clara, Calif.

Centeon will operate with funds generated by its sales. Hoechst, ofFrankfurt, Germany, and Rorer, of Collegville, Pa., will have equalownership of the joint venture. Rorer is a U.S. subsidiary of Paris-based Rhone-Poulenc.

Leahy said the combination of businesses is not expected to result inany consolidation of operations or lay-offs. John Sedor, formerlypresident of Armour, is Centeon's CEO.

"There will be no immediate savings," she added. "The costadvantage and cost efficiencies will be realized going forward ingrowing the business. We can invest in research and development attwice the level and there will be better utilization of plasmaresources. Behringwerke and Armour had products the other didn't."

Centeon, she said, will benefit from Armour's U.S. presence andBehringwerke's European and Asian markets. Neither Behringwerkenor Armour was traded publicly.

Nearly all of Armour's operations involved plasma protein products.It will continue to exist, Leahy said, but will not be an activemarketing organization.

Behringwerke's three main business areas are plasma products,diagnostics and vaccines. The formation of Centeon preceded byabout two months Hoechst's decision last week to sell 49 percent ofBehringwerke's vaccine business to Chiron Corp., of Emeryville,Calif., for about $118 million. Chiron also has an option to purchasethe rest of the Behringwerke's vaccine operations over the next fiveyears.

Behringwerke officials said the deal with Chiron reflected Hoechst'sdecision to move out of the vaccine business. Since Hoechst's $7.1billion takeover last year of Kansas City, Mo.-based Marion MerrellDow Inc., the German drug maker has been reassessing operationsworldwide.

Centeon has 4,500 employees, corporate offices in the U.S. andGermany, and five manufacturing facilities _ four in Europe and onein the U.S. n

-- Charles Craig

(c) 1997 American Health Consultants. All rights reserved.