YOU ARE HERE: LAT HomeCollections


Chiron Takeover of Rival Expected

May 19, 2003|Roger Vincent | Times Staff Writer

California biotechnology giant Chiron Corp. has agreed to buy British rival PowderJect Pharmaceuticals for $810 million to get the company's flu vaccine, published reports said.

Emeryville-based Chiron, the third-largest biotech company in the U.S., is expected to announce as soon as today that it will pay $8.91 a share, a 3.8% premium to PowderJect's closing price Friday.

A spokesman for Chiron declined to comment Sunday. Representatives of PowderJect were unavailable.

The takeover was reported by London's Sunday Telegraph and by Bloomberg News.

PowderJect makes Fluvirin, the second-best-selling flu vaccine in the U.S. Sales of Fluvirin totaled $151.7 million in the fiscal year ended March 31, a 40% increase from 2002.

Chiron, which sells vaccinations for rabies, meningococcal C disease and childhood illnesses such as polio, measles and mumps, would become a key player in the flu vaccine market. That part of the market is highly attractive, with revenues estimated at $500 million to $700 million worldwide. Some analysts predict that flu vaccines will generate $2 billion in revenues over the next five years.

Chiron, which also makes blood-testing products and biotechnology drugs, sells many of its products in Europe and other parts of the world. Only the company's rabies vaccine is sold in the U.S. Sales of Chiron vaccines reached $357 million last year.

The acquisition also would give Chiron experimental technology that allows the injection of drugs in powder form, without the use of a needle.

Cambridge, England-based PowderJect supplies smallpox vaccine to Britain and is in the running for another smallpox contract with the British government.

Last month Chiron said first-quarter profit rose to $62.5 million, or 33 cents a share, contrasted with a loss of $18.9 million, or 10 cents, in the same quarter a year before.

Shares of Chiron fell $1.09 on Friday to $41.05 on Nasdaq.

Los Angeles Times Articles