SCHERING-PLOUGH BUYS ORGANON FOR $14.4 BILLION

Schering-Plough is buying Organon BioSciences, the human and animal healthcare unit of Akzo Nobel, for $14.4 billion to supplement its late-stage product pipeline, the company announced.

The transaction should be completed by the end of 2007 and will raise Schering-Plough's earnings per share by approximately 10 cents in the first full year, the company said. Schering-Plough expects the move to save it $500 million annually after the first three years.

Organon has five compounds in Phase III development and several others in Phase II, which will enhance Schering-Plough's weak late-stage pipeline, company Chairman Fred Hassan said. The Phase III compounds include a novel schizophrenia and bipolar disorder treatment, an oral contraceptive and an infertility treatment.

The schizophrenia and bipolar treatment, asenapine, suffered a setback last year, with mixed clinical trail results causing Pfizer to pull out of a collaboration with Organon on the drug.

The acquisition will give Schering-Plough access to Organon's central nervous system and women's healthcare products, as well as help the company develop vaccines, Hassan added. Organon is the third-largest manufacturer of birth control products in the world, with products such as NuvaRing and Implanon.