Schwarz Pharma moves into OTC/vitamin area with Central Pharmaceuticals acquisition.

SCHWARZ PHARMA ENTERING U.S. OTC/VITAMIN MARKET WITH PURCHASE OF CENTRAL Pharmaceutical, a privately held branded generic and contract manufacturer based in Seymour, Ind. Milwaukee-based Schwarz Pharma Kremers Urban, a wholly-owned subsidiary of Germany's Schwarz Pharma AG, announced on June 7 it had entered into a merger agreement with Central Pharmaceuticals that provides for the purchase of all outstanding Central stock for $177.5 mil.

Central Pharmaceuticals will continue to be managed as an independent company as a division of Schwarz Pharma USA Holdings, which also includes Schwarz Pharma Kremers Urban. All of Central's 365 employees will be retained by Schwarz Pharma, which noted that Central's more than 160-person sales force "complements" its own, "both geographically and in physician specialties."

Central generated sales of $46.1 mil. for the year ended June 30, 1994. Prenatal vitamins, nutritionals (including Niferex Rx and OTC products), Rx analgesics, and Rx and OTC cough/cold medications generate 60% of Central's sales. The remaining 40% comes from contract manufacturing arrangements with about 45 companies, including Schwarz Pharma Kremers Urban.

On the same day, Schwarz Pharma announced the acquisition of Block Drug's U.S. prescription drug division, Reed & Carnrick. Schwarz Pharma indicated that it is paying Block about $116 mil. The two acquisitions are expected to be completed by June 30, Schwarz Pharma said.

Schwarz Pharma indicated that its main areas of interest in Reed & Carnrick are the company's prescription cardiovascular line and gastrointestinal lavage products. However, a range of other R&C products will apply to Schwarz Pharma's family practice area, particularly Actinex (masoprocol) cream for the topical treatment of actinic keratosis.

The two U.S. acquisitions will add approximately $100 mil. in sales to Schwarz Pharma's revenues. Reed & Carnrick had sales of $50.6 mil. for the year ended March 31. Schwarz Pharma AG reported sales of approximately $630 mil. for 1994. The German parent projects that "in 1996, the American contribution to total group sales will grow from 13.8% to 27.1%."

Schwarz Pharma Kremers Urban is headed by President Ian Troup, who assumed the post in 1987. Central Pharmaceuticals is headed by President and CEO Daniel Desmond, who became president and chief operating officer in 1992 and CEO in 1994.