OHMEDA PURCHASE FOR BAXTER OFFERS PAINLESS FIT: $104 MIL. CASH PURCHASE from U.K.-based BOC gives Baxter ownership of Ohmeda's anesthetic gas and critical care pharmaceutical product line that Baxter has marketed in the U.S. since 1995. Baxter said the division will be integrated into the Anesthesia Group of the company's I.V. Systems/Medical Products business.

In announcing the deal on Jan. 29, Baxter described Ohmeda as the "North American leader in the production of gases and drugs used for general and local anesthesia in surgical suites and intensive care units." Ohmeda's product line includes Suprane (desflurane) and Forane (isoflurane) anesthetic gases as well as anesthesia and critical care drugs such as the beta blocker Brevibloc (esmolol), the injectable opioid antagonist Revex (nalmefene) and Dizac (diazepam I.V.).

Since 1995, Baxter has marketed the Ohmeda anesthetic line in the U.S. with its own line of anesthesia products, which includes airway management, pain management, regional anesthesia, I.V. anesthesia, patient warming products, and disposable equipment, such as tubing, masks and catheters.

Last year, Ohmeda's pharmaceutical division generated approximately $150 mil. in sales. A relatively small part of Ohmeda pharmaceutical sales are generated outside the U.S. through a network of distributors, including Pharmacia & Upjohn in Europe and Zeneca in Asia.

Baxter said it expects the acquisition to be non-dilutive in 1998 and accretive in 1999. The company said the deal allows Baxter to "integrate vertically within the anesthesia business, leveraging expenses and customer relationships."

Ohmeda's pharmaceutical division is headquartered in Liberty Corner, N.J. and employs approximately 450. The company's primary manufacturing operation is located in Guayama, Puerto Rico. Baxter said it expects to maintain Ohmeda's presence in New Jersey and that it has not yet had discussions on management of the division.

Baxter's purchase of Ohmeda's pharmaceutical operations is part of a three-way deal orchestrated by Helsinki, Finland-based Instrumentarium to acquire part of BOC's healthcare business, which the British company put on the auction block last summer to focus on its industrial gases business ("The Pink Sheet" July 28, 1997, T&G-2).

Under the terms of the other two cash deals, Instrumentarium will purchase Ohmeda's medical systems and specialty products divisions for $494 mil., and Becton Dickinson will acquire the medical device division for $452 mil. The total deal will be worth approximately $1.05 bil. BOC noted that if the agreement is not completed by April 4, the three company consortium will have to increase their offer above the proposed purchase price.

Not included in Baxter's acquisition of Ohmeda pharmaceutical operations is the company's inhaled nitric oxide product. Instrumentarium and Becton Dickinson have established a 50/50 joint venture to continue research and development of inhaled nitric oxide.

Ongoing clinical trials are evaluating inhaled nitric oxide in conjunction with mechanical ventilation for the treatment of acute respiratory distress syndrome and hypoxic respiratory failure in term and near-term newborns. Instrumentarium indicated that the inhaled nitric oxide business could be ripe for a spin-off once the BOC deal is completed. "We will explore various strategic options for this business in the near future, " Instrumentarium stated in a January 29 release. An NDA covering another indication for nitric oxide, primary pulmonary hypertension in newborns, was withdrawn from FDA review last fall ("The Pink Sheet" Sept. 29, 1997, In Brief). At the time, Ohmeda said it planned to resubmit the NDA in 1998.

Baxter will acquire Ohmeda anesthetic and critical care pharmaceutical product lines for $104 mil. in cash.

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