UPDATE 3-IPO hopeful Nycomed inks lung-drug deal with Merck

* Daxas deal follows green light for drug last week in EU

* Nycomed to get undisclosed upfront fee and milestones

* Swiss drugmaker reiterates plans for IPO sooner or later

* Source says “base case” is for 2011 public offering

(Adds comment from source on IPO likely in 2011)

By Ben Hirschler and Quentin Webb

LONDON, April 26 (BestGrowthStock) – Privately owned Swiss drugmaker
Nycomed [NYCMD.UL], which is aiming for an eventual IPO, has
signed up Merck & Co (MRK.N: ) to help sell its key lung drug
Daxas in Europe and Canada, boosting its commercial prospects.

Monday’s deal with one of the world’s biggest pharmaceutical
manufacturers is an important validation for the once-daily
tablet.

It comes after a green light from European regulators on
Friday recommending Daxas for approval as a maintenance
treatment for severe chronic obstructive pulmonary disease
(COPD), despite a rebuff in the United States. [ID:nLDE63M10W]

A person familiar with the matter said Nycomed’s “base case”
was for a 2011 initial public offering (IPO), after Daxas had
been launched and its sales had had some time to take off. No
banks have yet been picked to help prepare a share sale, this
person said.

Nycomed will receive an undisclosed upfront fee from U.S.
drugmaker Merck and is eligible for certain payments based on
defined regulatory and commercialisation milestones for Daxas.

Once the drug wins final regulatory clearance, Merck and
Nycomed will co-promote Daxas in France, Germany, Italy, Spain,
Portugal and Canada. Nycomed will make and distribute the
finished product under the agreement.

In Britain, Merck will have exclusive commercialisation
rights but Nycomed has retained a co-promotion option.

The positive recommendation for Daxas from the European
Medicines Agency, whose experts see it as a useful add-on
therapy to inhaled bronchodilator drugs, contrasts with a
rejection from a U.S. Food and Drug Administration panel earlier
this month.

The U.S. panel voted 10 to five not to recommend Daxas,
dealing a blow to Nycomed and its existing partner Forest
Laboratories (FRX.N: ), which has U.S. marketing rights to the
drug.

Daxas is vying for a niche in the multibillion-dollar
worldwide COPD market, alongside rivals such as
GlaxoSmithKline’s (GSK.L: ) Advair and Spiriva, marketed by Pfizer
(PFE.N: ) and Boehringer Ingelheim.

MAJOR IPO…WHEN IT COMES

The fate of Daxas is pivotal to Nycomed, which has said in
the past it wants to launch an IPO but has never given an exact
timetable for listing its shares in Switzerland.

Company spokeswoman Beatrix Benz confirmed on Monday that an
IPO for Nycomed — which would be one of the biggest in the
pharmaceuticals sector in years — was still planned “sooner or
later”.

Nycomed also received a second piece of good news late on
Friday when a U.S. jury ruled that the patent on its Protonix
acid reflux drug was valid and had been infringed by Teva
Pharmaceutical Industries (TEVA.TA: ), which has been selling a
generic version of the drug since 2007. [ID:nN23216661]

Pfizer holds marketing rights to Protonix, known chemically
as pantoprazole.

The Protonix decision should boost Nycomed’s earnings,
although Benz said it was too early to speculate on the impact
as legal issues remain to be decided by the presiding judge in
the U.S. case.

Nycomed, which had sales of 3.2 billion euros ($4.30
billion) in 2009 and reported adjusted earnings before interest,
tax, depreciation and amortisation of 1.1 billion euros, is
majority-owned by four private equity firms, led by Nordic
Capital with a 42.7 percent stake.

The other three are Credit Suisse’s DLJ Merchant Banking,
Coller International Partners and Avista.

Investing

(editing by David Holmes and Sharon Lindores)
($1=.7439 Euro)

UPDATE 3-IPO hopeful Nycomed inks lung-drug deal with Merck