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Akzo Nobel sees strong drugmaker Organon after IPO
Fri Jun 16, 2006 11:09am ET

OSS, The Netherlands, June 16 (Reuters) - Dutch chemical group Akzo Nobel's pharma activities, to be spun off as Organon BioSciences, are strong enough to survive alone in a consolidating European drug industry, an Akzo board member said on Friday.

An Organon initial public offering is expected to take place this year or next.

"We are big enough to do our own research," Akzo board member Toon Wilderbeek said of the drugmaker.

Analysts question whether Organon BioSciences, which includes Akzo Nobel's animal health unit Intervet, will be able to survive as an independent company in a rapidly consolidating European pharma sector.

With an expected theoretical sum-of-the-parts value of up to 9 billion euros ($11 billion) and 2005 sales of around 3.5 billion euros, Organon Bioscience would make it into the top 20 of European pharma companies, analysts say. Wilderbeek also said he sees opportunities for the company to deliver services in early research stages to bigger pharmaceutical companies, a process he calls "insourcing".

Akzo currently uses activities of a smaller company in Spain in an early phase of research, but Wilderbeek expects Organon could also deliver such services to other big pharma companies, for example in contraceptives, where Organon is a leader.

"Until a few years ago Organon was a more inward looking company and the recent years and we should have realised that we have to work together," Wilderbeek said.

Organon BioSciences aims to announce a partnership this year for the last clinical and most expensive stage of the development of its insomnia drug Org 50081, which is expected to generate peak sales of 500 million euros around 2015.

Its schizophrenia drug Asenapine is being developed jointly with Pfizer and is now in Phase III testing. The drug is expected to be a blockbuster -- generating over $1 billion in peak sales.

Analysts are divided on the timing of the listing of Organon BioSciences. Four out of nine industry analysts polled by Reuters said at end of May they no longer expected a listing in 2006, though five still thought one could take place by the end of the year.

Source: Reuters

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