Schering-Plough Corporation has entered into a strategic agreement with Bayer designed to maximize the companies' pharmaceutical resources while maintaining each company's own strategic interests. The agreement is expected to be effective Oct. 1, 2004.
In the United States and Puerto Rico, Schering-Plough has acquired exclusive rights to market, sell and distribute Bayer's primary care products Avelox (moxifloxacin HCl) and Cipro (ciprofloxacin HCl) in the antibiotics category and will undertake on behalf of Bayer the US commercialization activities for the erectile dysfunction medicine Levitra (vardenafil HCl) under Bayer's co-promotion agreement with GlaxoSmithKline PLC, a release from Schering-Plough said.
In the Japanese market, Bayer will co-market Schering-Plough's novel cholesterol absorption inhibitor Zetia (ezetimibe), currently under regulatory review in Japan, leveraging Bayer's established expertise and relationships with cardiovascular specialists to enhance the local launch of the product. Additionally, under the terms of the agreement, Bayer will support the promotion of certain Schering-Plough oncology products in the United States and key European markets for a defined period of time.
"This strategic agreement represents a further step in our Action Agenda to build the New Schering-Plough," said Fred Hassan, Schering-Plough chairman and chief executive officer. "The collaboration will enhance our primary care product line and complement our respiratory franchise. We anticipate that it will also strengthen our presence in Japan through the co-marketing of Zetia with Bayer in this key cardiovascular market, pending approval by Japanese authorities," he added.
Under the agreement, there will be a business integration and transition period during the remainder of 2004. For Schering-Plough, the transaction is expected to be mildly dilutive in 2004 in terms of its impact on earnings per share. Thereafter, the transaction is expected to be mildly accretive. Products in development at both companies are not covered under the agreement. Bayer's drug products will remain the property and legal responsibility of Bayer and continue to be sold under the Bayer brand names.
The agreement with Bayer potentially restricts Schering-Plough from marketing products in the United States that would compete with Bayer's quinolone antibiotic Avelox. As previously announced on June 22, 2004, Schering-Plough and Toyama Chemical Co. Ltd. entered into a definitive licensing agreement for garenoxacin, Toyama's proprietary quinolone antibacterial agent. As a result of the agreement with Bayer, Schering-Plough expects it may need to sublicense rights to the Toyama product in the United States. The company is exploring its options with regard to garenoxacin and will continue to fulfil its commitments to Toyama under its arrangement, including taking the product through regulatory approval, the release added.
Concurrent with the announcement, Bayer said it plans to build a global oncology business. The agreement with Bayer provides for Bayer to promote certain Schering-Plough cancer products in the United States and key European markets for a defined period of time, supplementing efforts by Schering-Plough's oncology sales force.