Medeva Sets Up Acquisition Loan

UK pharmaceutical company Medeva is about to hit the acquisition trail again with the aid of an unsecured credit facility of L125 million ($192.7 million) over five years. It is the first time that the firm has obtained a syndicated loan.

In the past, Medeva has undertaken short-term borrowing and used shareholder funds for financing, but the firm's newly-appointed finance director Gary Watts told the Financial Times that it was now time for Medeva to start using its balance sheet to fund future development.

Bill Bogie, Medeva's chief executive, has already indicated that the firm is seeking an acquisition in Germany, having divested the oncology specialist Ribosepharm (Marketletter February 26). Also the firm is developing its pipeline to help generate growth as the key driver of 1995 results, methylphenidate, is starting to show signs of growth slowing down. Morgan Stanley analysts note that without methyl-phenidate sales growth, sales for the company would have declined, as would have profits.