Polpharma moves closer to acquiring Bioton’s antibiotics business

2010-01-27

Polpharma has applied for anti-trust clearance to acquire a part of Bioton, the Office of Competition and Consumer Protection (UOKiK) has revealed. The application was received on 31 December and is under review, the Office said.
The news means that the two companies have reached agreement about the sale of Bioton’s non-core antibiotics business to Polpharma. In mid-December Bioton CEO Slawomir Ziegert signalled that preparations for the deal were at a highly advanced stage. He added that a full merger of the two companies – another strategic option that has been under consideration - had a lower priority.
According to market observers cited by Parkiet, Polpharma should have no difficulty obtaining the Office’s approval for the transaction, given that the market share of Poland’s largest domestic drug maker – and number three player in Poland overall - is only about 4.5%
Bioton meanwhile derives only about 25% of its revenues from antibiotics, which command lower margins than its core insulin products (but the unit is profitable). The biotech firm is divesting non-core assets to reduce its debt load and fund drug development.
In November Bioton signed a letter of intent with Polpharma to explore several strategic options, including a merger and a sale to Polpharma of its antibiotics business and/or of its Italian subsidiaries. A feasibility study of a potential merger was to be completed by 15 December, and the parties undertook to decide on its viability and basic parameters until 28 February.