Schering AG Making Oncology A Primary Focus; Dermatology Unit Will Become Separate Entity
This article was originally published in The Pink Sheet Daily
Executive Summary
Berlex’ German parent says the new focus will help it exploit the potential of a Phase III angiogenesis inhibitor under development with Novartis. Portfolio restructuring includes termination of R&D in cardiovascular and CNS areas, except for multiple sclerosis and Parkinson’s disease.
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Schering AG is making oncology one of its four primary business areas as part of an effort to sharpen the German pharmaceutical company's focus and increase its profitability. Oncology joins gynecology/andrology, specialized therapeutics and diagnostic imaging as Schering's four major product areas, the company announced June 15. Schering AG's Phase III oral angiogenesis inhibitor PTK787-ZK222584 is the cornerstone of the company's oncology pipeline. PTK-ZK, which is being developed in partnership with Novartis, entered Phase III for metastatic colorectal cancer in early 2003. The compound "has the potential to be the first orally active angiogenesis inhibitor to be used long-term in combination with standard chemotherapy for the treatment of patients with metastatic colorectal cancer," Schering's website states. Schering is also eyeing other opportunities for PTK-ZK, including glioblastoma and renal cell cancer. The company also hopes to expand its hematology franchise as part of its renewed focus on oncology. In the U.S., Schering's Berlex subsidiary markets the leukemia agents Campath (alemtuzumab), Fludara (fludarabine) and Leukine (sargramostim). Schering also distributes Biogen Idec's non-Hodgkin's lymphoma therapy Zevalin (ibritumomab) outside the U.S. In making oncology a strategic focus, Schering said the areas of dermatology, cardiovascular and central nervous system are no longer integral parts of the company's strategy going forward. Schering will create "a separate legal entity" for its dermatology business. "Dermatology requires increasing resources in order to build up a global business and to fund promising projects in early development," Schering said. "This stand-alone dermatology company will have the flexibility to build up critical mass in important markets by actively pursuing partnerships with third parties." The new entity's portfolio will consist of products for eczema, dermatomycoses, acne, psoriasis and rosacea, including Berlex' Finacea (azelaic acid gel 15%) in the U.S. The stand-alone dermatology company initially will consist of more than 600 employees worldwide and be headquartered in Berlin. Schering also plans to terminate all research and development activities in the areas of cardiovascular and central nervous system diseases, except for multiple sclerosis and Spheramine for Parkinson's disease. Spheramine, a cell-based therapy, is being developed under a collaboration with Titan Pharmaceuticals. The portfolio restructuring program is aimed at achieving an operating profit margin of 18% by 2006. A total of 2,000 positions will be eliminated, with total cost reductions in production, administration and development estimated at more than €200 mil. - Sue Sutter |