Bayer Acquires Biologics Manufacturing Facility, Rights from Novartis

Bayer Schering Pharma AG, (Berlin, Germany) has completed the acquisition of a biologics manufacturing facility in Emeryville, CA, from Novartis. Bayer will manufacture its multiple sclerosis drug, Betaseron (interferon beta-1b), at the Emeryville site, have full control of all manufacturing and process technology used in the production of Betaseron, and retain the employees associated with the manufacture of the product.

In 1993, Schering (acquired by Bayer in 2006) signed an agreement with Chiron Corporation covering the regulatory filing, development and supply of Betaseron. Novartis assumed the rights to this product through the purchase of Chiron in 2006. As part of the transaction, Novartis has transferred manufacturing responsibility to Bayer Schering Pharma for Betaseron and has received a one-time payment of approximately $200 million for the transfer of production equipment, inventory, and the leasing of buildings at the site. Bayer Schering Pharma will continue to pay Novartis royalties equivalent to those currently being paid on net sales of Betaseron manufactured by Bayer at the Emeryville facilities until expiration of the original regulatory filing, development, and supply agreement in October 2008, after which no more royalties will be due to Novartis on the sales of Betaseron.

Bayer Schering Pharma will support Novartis in the regulatory filing process of a Novartis brand of the 250-mcg version of interferon beta-1b. When approved by health authorities, Bayer Schering Pharma will supply the 250-mcg version of interferon beta-1b to Novartis from 2009 forward and receive in return a double-digit royalty payment from Novartis.