Swiss-based biotech Serono intends to seek acquisition candidates - both companies and late-stage products - as part of a new growth strategy.

"Serono will invest in its existing businesses and will actively pursue opportunities for growth through acquisitions," the company said April 10. The revised strategy accompanies a decision to terminate "discussions concerning a sale of the company."

Explaining the move, the biotech's controlling shareholder, the Bertarelli family, said that "the offers it received did not adequately reflect the future prospects of the company."

Last November, Serono retained Goldman Sachs to "explore various strategic alternatives for the company." Merger talks had been held with Novartis, GlaxoSmithKline, Sanofi-Aventis and Pfizer.

The company's pipeline is currently focused on four main therapeutic areas: multiple sclerosis, reproductive health, dermatology and growth & metabolism. Serono said it is interested in further expanding into auto-immune diseases and oncology.

Serono's board will propose an increase in authorized share capital during its annual shareholders meeting April 25 to create the financing necessary to pursue the acquisition approach, the company said.

Serono expressed particular interest in purchasing products in late Phase III development. The company currently markets the MS therapy Rebif , psoriasis drug Raptiva and AIDS wasting agent Serostim .

U.S. sales for Rebif (interferon beta-1a), which Serono co-markets with Pfizer, rose 31.8% to $389.5 mil. in 2005. According to Serono, the product is the fastest-growing MS therapy in the domestic market. Serono filed a supplemental BLA for Rebif for the treatment of relapsing MS in April and expects approval in 2007.

In October, the firm agreed to a $704 mil. settlement with the Justice Department over promotions of Serostim, marking the largest penalty ever paid by a pharmaceutical manufacturer to resolve civil and criminal investigations into off-label marketing (¹ Also see "Serono Labs Pleads Guilty To Criminal Conspiracy Charges In Serostim Case" - Pink Sheet, 17 October, 2005.).

- Turna Ray

Serono Looks To Acquire Rather Than Be Acquired

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