Replies to post #41402 on Biotech Values

[DewDiligence]

Re: SGP / Big Pharma mergers

>I seem to recall that in the event of a SGP merger/buyout the rights to the Zetia and Vytorin drugs would revert to MRK (a barrier to potential bidders other than MRK).<

If there’s a formal “change of control,” SGP could lose its half of the Zetia/Vytorin JV for less than its market value. However, if SGP engineered a merger so that there was no formal change of control, they would finesse the problem.

Idec Pharmaceuticals had the identical problem in their Rituxan venture with DNA, but Idec was still able to merge with Biogen. They pulled it off by constructing the merger to make Idec the surviving legal entity and having Idec own slightly more than half the equity in the merged company.