Pink Sheet is part of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call +44 (0) 20 3377 3183

Printed By



Executive Summary

CONNAUGHT "CONSIDERING" 50-50 MERGER WITH INSTITUT MERIEUX following the French vaccine maker's second bid for Connaught. The 50-50 merger proposal, received by Connaught on March 3, does not include the contract research business, Bio-Research Labs, which would be spun-off to Connaught shareholders if the deal is consummated. The new venture would be a Dutch firm called Merieux-Connaught N.V. Connaught reported in a March 6 release that its directors "have met over the weekend to consider these proposals and have authorized management to seek further clarification from Institut Merieux on several issues." The Toronto-based vaccine manufacturer said it would make "a further announcement . . . when these issues have been settled." The merger would be subject to shareholder and court approval, Connaught said. Institut Merieux is taking a friendlier tack in its pursuit of Connaught this time around after failing in an unfriendly bid last April. At that time, Institut Merieux and the Quebec provincial government pension fund, Caisse de Depot et Placement du Quebec, which together hold nearly one-third of Connaught, waged an unfriendly assault on Connaught with a $32 (Canadian) per share bid for approximately 20% of outstanding Connaught shares ("The Pink Sheet" April 18, p. 6). With Institut Merieux holding 12.6% of Connaught and Caisse holding approximately 20%, a successful tender offer would have given Institut Merieux majority control of Connaught without having to bid for all of the Canadian company. However, the takeover was rejected by the Toronto and Ontario securities exchanges, which ruled that the bid was unfair to the nearly 50% of Connaught shareholders not tendering their shares. A merger of the two companies would create a new company with worldwide health care product sales of nearly $500 mil. and a strong position in the worldwide vaccine market. Connaught's sales in 1988 totaled $192.5 mil. (Canadian), up slightly over 1987, while net earnings grew 36.7% to $29.3 mil. (Canadian). R&D spending in 1988 reached $28 mil. Institut Merieux reported sales of $351.9 mil. (Canadian) last year and R&D expenditures of $52 mil. (Canadian). The merger would also greatly expand Institut Merieux's access to the U.S. market. The French firm currently markets four vaccines in the U.S. through a 15-person sales force. Merieux, a majority owned subsidiary of Rhone Poulenc, manufactures its vaccines at a plant in Lyons, France. Connaught manufactures and markets a line of vaccines in the U.S. and maintains a sales force of approximately 100 reps in this country.

You may also be interested in...

Part D Discount Liability Coming Into Focus: CMS Releases Drug Cost Data

Newly released Medicare Part D data sheds light on the sales hit that branded pharmaceutical manufacturers will face when the coverage gap discount program gets under way in 2011

FDA Skin Infections Guidance Spurs Debate On Endpoint Relevance

FDA appears headed for a showdown with clinicians and the pharmaceutical industry over the proposed new clinical trial endpoints for acute bacterial skin and skin structure infections, the guidance's approach for justifying a non-inferiority margin and proposed changes in the types of patients that should be enrolled in trials

Shire Hopes To Sow Future Deals With $50M Venture Fund

Specialty drug maker Shire has quietly begun scouting deals with a brand-new $50 million venture fund, the latest of several in-house investment arms to launch with their parent company's pipelines, not profits, as the measure of their worth




Ask The Analyst

Ask the Analyst is free for subscribers.  Submit your question and one of our analysts will be in touch.

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts