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LEDERLE WILL CO-PROMOTE PRAXIS' HibTITER VACCINE IN THE U.S

Executive Summary

LEDERLE WILL CO-PROMOTE PRAXIS' HibTITER VACCINE IN THE U.S. beginning "immediately," Praxis announced on Aug. 4. The one-year distribution agreement can be terminated in 30 days should the proposed acquisition of Praxis by Lederle's parent company American Cyanamid not take place. Lederle will purchase a minimum of 750,000 doses of the conjugate Haemophilus influenzae b vaccine product under the agreement and pay approximately 70% of the product's net sales to Praxis. With Lederle's "700-person sales force . . . adding HibTITER to their office calls, the Praxis vaccine will immediately reach many more pediatricians in a shorter period of time than would have been possible without this new distribution agreement," Praxis CEO Bernard Ouellette noted. "The market share for HibTITER, which protects against diseases like meningitis, should be significantly affected." Praxis retains co-promotion rights in the U.S. and exclusive non-U.S. rights, as well as exclusive rights to market to the Centers for Disease Control, state governments and the U.S. military. A definitive merger agreement between the two companies valued at about $ 240 mil. was announced in June ("The Pink Sheet" June 12, p. 13). However, the deal is contingent upon approval by Praxis shareholders and a meeting has yet to be scheduled. "If for any reason the merger is not concluded," the release adds, "the Praxis-Cyanamid distribution agreement can be canceled upon 30 days' notice by Praxis." In many respects, the arrangement is similar to co-promotion agreements announced by SmithKline and Beecham and by Bristol-Myers and Squibb at the time of the respective companies' merger announcements. Such agreements allow merging companies' sales forces to begin to familiarize themselves with each other's products prior to the deal being finalized. Such deals also complicate unfriendly third party bids while a merger is being completed. The added marketing muscle of the Lederle detail force allows Praxis to play short-term catch-up with competitor Connaught, whose ProHIBIT conjugate vaccine product was approved at the end of 1987, exactly one year before HibTITER. Praxis began marketing its product during the first quarter of 1989 with a sales force of about 30 reps. Both the Connaught and Praxis products are indicated for infants 18 months or older, and the companies are in a race to get an indication for infants down to two months. In addition, Merck has filed for a 12-month indication for its product, PEDVAX-HIB, and is actively pursuing a two-month indication.
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