BioChem Pharma Inc., looking to establish cash flow and a worldwidepresence, agreed to buy 100 percent of the shares of the Ares-SeronoGroup's diagnostic operations for about $65 million, the companiessaid Thursday.Under the agreement, Serono Diagnostics will become part ofBioChem ImmunoSystems Inc., the diagnostics arm of BioChemPharma. Serono Diagnostics had 1993 sales of $89.3 million _ andmade a profit for the first time in years _ which should help BioChemuntil its first drug candidates reach the market."Our fundamental target is to be a fully integrated globalbiopharmaceutical company," Jean-Yves Duthel, vice president, publicrelations for BioChem, told BioWorld. ImmunoSystems had revenuesof about $20 million in 1993 and Duthel said the combined company isexpected to have sales of $120 million. BioChem Pharma is in Laval,Quebec, while its diagnostics subsidiary is nearby in Montreal.Ares-Serono, of Geneva, Switzerland, said it made the move as part ofa plan to concentrate more on its pharmaceutical sector."Right now in our pipeline we have six recombinant products," GinaCella, director of corporate communications for Ares-Serono, toldBioWorld. "We felt that with such a commitment to biotechnology, andmoving our product line from naturally-derived drugs into genetically-engineered drugs, we really need to concentrate our efforts in thisarea."Fabio Bertarelli, CEO of Ares-Serono, said he expects 90 percent of thecompany's products will be produced through biotechnology by 2000.Duthel said the $65 million would be paid as about $44 million cash _$15 million from BioChem and $29 million from a loan BioChem willget from a bank _ and the remaining $21 million in a note to Ares-Serono. He said BioChem has about $45 million cash on hand, and willget another $35 million from the sale of 30 percent of its position inNorth American Vaccine Inc., of Beltsville, Md.BioChem, founded in 1987, increased its work force from 350 peoplein three countries to 950 in 20 countries with the acquisition. And thecompany, which was just entering the U.S. market, now has a largepresence with a manufacturing plant in Allentown, Pa., and a largemarketing force.BioChem, in its relationship with Glaxo Holdings plc (and nowWellcome plc), hopes to have money coming in from the therapeuticside as early as next year. BioChem's 3TC, a nucleoside analogue, waslicensed to Glaxo in 1990. In March, Wellcome and Glaxo, both ofLondon, signed a letter of intent giving Wellcome the option todevelop and market 3TC for HIV. The product is in Phase II/III testingin combination with Retrovir (AZT), and the filing of a new drugapplication is expected by the end of the year by Glaxo, a 17 percentshareholder in BioChem, Duthel said.BioChem also has Lamivudine, another formulation of 3TC, in late-stage clinicals with Glaxo. It is expected to enter Phase III testing thissummer for hepatitis B, Duthel said. n
-- Jim Shrine
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