Ploughing Into Acquisition Rewards

It certainly didn't take long for Schering-Plough (NYSE: SGP  ) to start reaping rewards from its purchase of Organon BioSciences.

Just seven days after it closed its acquisition, the drugmaker announced that the FDA had accepted a New Drug Application (NDA) for antipsychotic asenapine, which it acquired in the deal that sent Akzo Nobel's (Nasdaq: AKZOY  ) human- and animal-health-care subsidiary to Schering.

If it's approved next year, asenapine would enter a competitive market for bipolar and schizophrenia treatments, which is probably one of the reasons that Pfizer (NYSE: PFE  ) discontinued its partnership developing asenapine with Organon.

However, the compound has performed fairly well in clinical trials against future competitors. In one study, asenapine worked as well as Eli Lilly's (NYSE: LLY  ) Zyprexa in reducing mania symptoms in bipolar patients, and caused weight gain in fewer patients, so it could be favored by patients and doctors. In a head-to-head trial against Johnson & Johnson's (NYSE: JNJ  ) Risperdal, asenapine reduced schizophrenia symptoms, but again produced less weight gain than the drug already on the market. Finally, a safety trial comparing it to AstraZeneca's (NYSE: AZN  ) SEROQUEL demonstrated that the drug has minimal if any effect on heart rhythm.

Schering won't know for a while whether the $14 billion purchase was a good deal, but the timing of the NDA filing epitomizes why Schering made the purchase. The Organon acquisition gives Schering five drugs in phase 3 trials and another 16 in earlier stages of the clinic. Add to that about $5 billion in sales -- minus some poultry vaccines that the FTC made it sell off -- and Schering is well on its way to being less dependent on its cholesterol drug partnership with Merck (NYSE: MRK  ) for future growth.

Further Foolishness on antipsychotics:


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 540846, ~/Articles/ArticleHandler.aspx, 12/22/2014 6:31:54 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement