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Zeneca to Buy Remaining Stake of Salick

Health care: The deal for the other 50% of the cancer specialist was expected. No word on management fallout.

March 28, 1997|DAVID R. OLMOS | TIMES STAFF WRITER

British drug maker Zeneca Group said Thursday that it will pay about $234 million to acquire the 50% of Los Angeles-based cancer treatment specialists Salick Health Care that it doesn't already own.

The deal had been anticipated by analysts, although Salick executives said they were not officially informed of Zeneca's plans until recently.

Zeneca spokeswoman Judith Auchard declined to discuss whether the firm will make any management changes when it assumes control of Salick on April 10.

The driving force behind the Los Angles firm is founder Bernard Salick, a brash physician who has built his business on the idea that cancer treatment can be improved even as costs are reduced.

For the Record
Los Angeles Times Saturday March 29, 1997 Home Edition Business Part D Page 2 Financial Desk 1 inches; 30 words Type of Material: Correction
Salick Health Care--A story in Friday's editions about Salick Health Care should have said that Salick had $186 million in sales and $10 million in operating profit. Also, Salick operates 10 kidney dialysis centers.

A source close to Salick Health Care said there has been considerable friction between Zeneca management and Salick since the deal was struck and that Bernard Salick might be removed as chairman.

But Salick said in an interview that his relationship with Zeneca is "very good" and he anticipates "very little change" in management under Zeneca.

"We all have long-term contracts . . . " Salick said. "They'd have to drag me out."

When Zeneca bought its initial 50% stake in 1995, the British firm said Salick would provide valuable insight into cancer treatments that could assist Zeneca's drug research efforts. Under the original deal, Zeneca had the option to buy the remaining half of Salick by 1999.

"It was always our intention" to acquire full control of Salick, Auchard said. "We made the decision that this was a good time. We think there are certainly growth opportunities available to Salick in the near term."

Salick operates 11 outpatient cancer clinics affiliated with prominent U.S. hospitals and is known for efforts to reduce costs of treating cancer, the nation's costliest disease. It also runs about 200 kidney dialysis centers.

Although several observers have suggested one reason Zeneca invested in Salick was to sell more cancer drugs to Salick physicians, Zeneca says that is not the case.

Zeneca is the world's second-biggest maker of cancer drugs after Bristol-Myers Squibb and has said its intention is to become the world's biggest. It makes Nolvadex and Arimidex, used to treat breast cancer, and the prostate cancer drugs Zoladex and Casodex.

It had $186 million in sales and $10 million in operating profit before exceptional items last year, compared with year-earlier results of $105 million in sales and $12 million in operating profit, Zeneca said.

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