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Announcing An Important News Break!
UPDATE 2-Embattled Bayer to sell plasma business
Thu October 2, 2003 11:24 AM ET
FRANKFURT, Oct 2 - Bayer AG BAYG.DE said on Thursday it planned to sell most of its blood products business, a move that could presage other sales in its drugs division following a fruitless search for a joint venture partner.
The German chemicals and pharmaceuticals company said in a statement the business up for sale posted 293 million euros ($343 million) in sales in the first half of 2003, about 13 percent of total pharmaceutical and biological product turnover. It will keep haemophilia drug Kogenate, a product with first-half sales of 215 million euros. The announcement comes a day after sources familiar with the situation told Reuters Bayer was set to give up its quest for a single partner for its drugs unit and could split it up. The sources also said a sale of part of the blood products business was likely.
Bayer shares fell on the news of the blood plasma disposal and analysts said it reinforced fears the group could no longer find a broad solution for its undersized drugs business. "This looks like another step in the strategy -- Bayer's clearly finding it difficult to find a partner for the drugs unit," said Bayerische Landesbank analyst Michael Butscher. "It may have to develop a standalone strategy or restructure, cut costs and sell product lines," he said.
Bayer shares, a constituent of the DAX blue-chip index .GDAXI , were down 3.4 percent at 18.10 euros at 1450 GMT, underperforming the DAX, which was down 1.4 percent.
A Bayer spokesman said talks on a sale had not yet started. Butscher said Bayer may have problems finding a buyer even for the blood plasma unit, headquartered at Research Triangle Park in North Carolina and with 1,350 employees, mostly in the United States.
"The unit is not really attractive -- there's not much earnings power there," he said. In January, Bayer and Franco-German firm Aventis SA AVEP.PA called off a joint venture for blood products, which would also have included Kogenate, after failing to agree terms. The range of products derived from blood plasma includes drugs such as Gammimune, for treatment of immunodeficiency disorders, and Prolastin, for congenital pulmonary emphysema. The unit also features Gamunex, an intravenous immunoglobulin that received marketing approvals in the United States earlier this year.
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