BIOCHEM BUYS SERONO DIAGNOSTICS

Biochem Pharma of Canada has finalized a deal to purchase the Swiss-based company Serono Diagnostics, formerly part of the Ares-Serono group, for C$61 million ($43.9 million). The deal involves a bank loan of C$28.6 million, C$15 million in cash and a loan from Ares-Serono of C$17.4 million. The Swiss firm, which had sales of 1.12 billion Swiss francs $844.6 million last year.

Francesco Bellini, president of Biochem, said that the deal did not represent "a fish that ate a whale," rather, he said that it was the launch of Biochem into the "big time." The company "is anticipating another period of strong growth as it enters its ninth fiscal year as the addition of Serono results in a marketing network covering 40 countries." he added. Mr Bellini said that the acquisition should result in income of approximately C$100 million in fiscal 1994-95 and some C$200 million in the following year.

Aside from the newly-acquired Serono sales, much of Biochem's future revenue is expected to come from the anti-AIDS compound, lamivudine (3TC), which is licensed to Glaxo. Phase III trials are nearly complete, reports the company, and approval requests are expected to be submitted to various regulatory authorities by the end of this year. It is unclear, as yet, as to whether Wellcome will take over marketing and development of the drug as it has agreed in principle with Glaxo to do so, although no final decision has been made (Marketletter April 4). The cost of lamivudine to AIDS patients is expected to be around C$3,000 per year.