UPDATE 1-IPO hopeful Nycomed spends $210 mln on China deal

* Buys 51 pct of Techpool, eyes other emerging market deals

* Secures access to Chinese supplies of biologic drugs

* CEO says not currently working on IPO, possible in 2011

* Wants to secure U.S. okay for Daxas lung drug before IPO

(Adds CEO interview, comments on IPO plans)

By Ben Hirschler

LONDON, Nov 1 (BestGrowthStock) – Swiss drug firm Nycomed [NYCMD.UL]
has bought a majority stake in a Chinese pharmaceutical company,
underscoring Western manufacturers’ hunger to boost their
presence in the country.

Nycomed — which is privately owned but is considering a
public offering — paid around $210 million for the 51.34
percent stake in Guangdong Techpool Bio-Pharma, Chief Executive
Hakan Bjorklund said on Monday.

Nycomed already has a large business in Russia, and is
pushing hard into other emerging markets in a strategy mirrored
by Western drug companies around the world.

“At the end of this year China will probably be the third
largest pharma market in the world, and it’s rapidly growing, at
20-30 percent a year,” Bjorklund said in a telephone interview.

“If you want to be a strong emerging markets player, you
have to have a significant presence in China.”

Techpool, founded in 1993, specialises in developing
biologic drugs derived from natural sources, and the deal gives
Nycomed access to a supplier of protein-based biotech drugs with
international potential.

Techpool was previously majority-owned by Shanghai
Pharmaceuticals (601607.SS: ), which now holds 40.8 percent.

The Guangdong-based company’s products — including
treatments for sepsis and stroke — are sold across China and
exported to a number of countries, such as Japan and South
Korea. In future, Russia might be added to this list.

Bjorklund said he was eyeing more similar-sized acquisitions
in other emerging markets.

Nycomed has said in the past it wants to launch an initial
public offering (IPO) but has never given an exact timetable for
listing its shares.

Bjorklund said an IPO was not an immediate priority but it
could happen in 2011.

“Currently, we are not working on an IPO,” he said, adding
the company had yet to appoint banks to handle the offering. “I
can’t tell you whether it is going to be 2011 or later.”

CRYSTALLISING VALUE

An IPO would crystallise Nycomed’s value at billions of
euros, and allow its main existing shareholders — a group of
private equity funds — to sell down their stakes, while new
money would come in from new investors.

Nycomed, which had sales of 3.2 billion euros ($4.5 billion)
in 2009, is majority-owned by four private equity firms, led by
Nordic Capital with 42.7 percent. The others are Credit Suisse’s
(CSGN.VX: ) DLJ Merchant Banking, Coller International Partners,
and Avista.

One critical element to the IPO story will be Nycomed’s new
lung drug Daxas, which is now on sale in its first three
European markets — Germany, Denmark and Britain — under a
marketing deal with Merck & Co (MRK.N: ).

In the United States, where Forest Laboratories (FRX.N: ) has
marketing rights, a response from the Food and Drug
Administration on the drug’s approvability is expected in the
first quarter of 2011.

“Hopefully we’ll see a U.S. registration before the IPO,”
Bjorklund said.
(Editing by Erica Billingham, Sharon Lindores)
($1=.7158 Euro)

UPDATE 1-IPO hopeful Nycomed spends $210 mln on China deal