Chiron Corp.'s stock continued its climb Monday on speculationsurrounding its negotiations for a "potential strategic alliance" with apartner that would buy a substantial minority interest in theEmeryville, Calif.-based company.

Chiron has not identified the "other company" and said no agreementhas been reached. The company declined further comment on thepotential deal Monday.

Wall Street speculation has focused on either Switzerland-basedCiba-Geigy Ltd. or Johnson & Johnson, of Brunswick, N.J., as theprobable minority investor. Both big pharmaceutical companies havesubstantial joint ventures with Chiron. Ciba-Geigy and Chiron have a50-50 interest in Biocine Co., which they formed to developvaccines. Johnson & Johnson and Chiron have several agreementsfocusing on diagnostics.

Contacted Monday, spokesmen from Ciba-Geigy and Johnson &Johnson declined comment on Chiron, saying their companies do notrespond to market rumors.

Chiron's stock (NASDAQ:CHIR) closed Monday at $74.25, up$2.75, or 4 percent. The increase was modest when compared withFriday's activity: the stock soared $18 a share before settling back toan increase of $11.75, or 20 percent, by the close of trading. (SeeBioWorld Today, Nov. 14, 1994, p. 1.)

Matthew Geller, an analyst with Oppenheimer & Co. in New York,said Ciba-Geigy would be his "No. 1 candidate" in speculating onChiron's potential minority investor.

"But it could be someone other than Ciba or Johnson & Johnson," hesaid. "The most exciting aspect about Chiron's pipeline of productsis Biocine, and Ciba already owns a piece of that."

Chiron's diversity of products, Geller added, would be attractive toother big pharmaceutical companies. But rumors that Chiron set itsprice at $100-a-share, don't indicate the stock would jump to thatlevel.

"Stocks usually end up at a discount to the price paid by the buy-incompany," he observed. "On that basis, the stock is saying the deal ismade." n

-- Charles Craig

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