Novartis considers buying vaccines-maker Berna to combine with other acquisition target Chiron

By E. Janene Geiss

Philadelphia, Dec. 19 - Novartis said Monday that it has decided to explore the benefits of acquiring the Swiss vaccines company Berna Biotech AG and combining its operations with those of Chiron Corp., a U.S. vaccines company that Novartis is currently in the process of acquiring.

The combination of Berna and Chiron would offer complementary geographic coverage and product ranges, officials said in a company news release.

Novartis said it also would gain access to the attractive proprietary technology platforms of Berna, and a potential acquisition would assure continued Swiss ownership of an increasingly important health care business with public health responsibilities.

In order to prepare a potential competing cash offer, Novartis said it has requested from and has been granted by Berna the opportunity to perform a due diligence investigation even though Berna has an acquisition deal carved out with Crucell NV, a Dutch biotechnology company.

Crucell made an all-share exchange on Dec. 15.

Crucell's offer, valued at CHF591 million, is at a 27% premium to the stock's Nov. 30 closing price, using Crucell's close of €22.70 per share, according to an analyst.

Issuing its own statement, Crucell acknowledged Novartis' interest, but stressed to shareholders that it has made the only offer, its offer was approved by Berna's board and that it remains committed to the acquisition.

Novartis said that at this time, economic terms of its potential offer have not yet been determined, and no assurance can be given that it will make any offer.

Berna, based in Berne, Switzerland, develops, produces and markets vaccines and immunotherapeutics for private and public markets worldwide.

Novartis announced its intention in October 2005 to acquire the remaining 58% stake in Chiron Corp. that it does not currently own for about $5.1 billion.

This transaction, which received rapid review and approval by the U.S. Federal Trade Commission, is expected to be completed in the first half of 2006.

Novartis is a Basel, Switzerland pharmaceutical and consumer health company.

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