DuPont closes in on fate of medical imaging business

Apr 8, 2001

Chemical giant DuPont is said to be close to a decision on the fate of its pharmaceutical business, which has been targeted for a sale or spin-off. But DuPont's efforts to dispose of the division have reportedly been caught between the slumping stock market and DuPont's high asking price for the business.

Wilmington, DE-based DuPont said last December that it planned to "evaluate various strategic alternatives" for the pharmaceuticals business, which the parent company said would have more potential outside of DuPont's corporate structure.

The division, DuPont Pharmaceuticals of North Billerica, MA, is best known in medical imaging for its Cardiolite cardiac radiopharmaceutical. Other imaging products are Definity, a cardiac ultrasound agent that is close to commercialization, and Miraluma, a breast imaging radiopharmaceutical based on Cardiolite.

Possible suitors for the pharmaceuticals business include German drug giant Bayer. Bayer's chairman, Manfred Schneider, told stockholders March 15 that the company might be interested in acquiring the division. In addition, Internet financial news site MotleyFool.com reported that the companies were talking about a deal.

Sources at the two companies would not confirm that talks were taking place, but Sutro & Co. industry analyst Larry Smith said DuPont's drug business would help Germany-based Bayer in the U.S., where it is weak.

Bayer, whose pharmaceutical division is focused on prescription drugs, announced simultaneously on March 15 that it is divesting the remaining 30% interest it has in Agfa-Gevaert, the Belgian imaging company. This would seem to suggest that Bayer isn't interested in imaging, and that DuPont might sell its imaging properties separately.

DuPont is being close-mouthed about the spin-off, saying that it will examine all options, including an IPO. The parent company's chairman and CEO, Charles Holliday, told an executive group on March 15 that a "swap" with another company is also a possibility.

Industry experts who requested anonymity believe DuPont is asking too much for the pharmaceuticals unit, and will opt to take it public. The division's CEO, Richard De Schutter, is scheduled to hold an investor business conference April 11, but corporate spokesperson Clif Webb said the focus of that meeting is R&D, not specifically the fate of pharmaceuticals.

Another possible suitor is radiopharmacy firm Syncor International. The Woodland Hills, CA, company is DuPont's marketing partner for Cardiolite, and had preliminary discussions with DuPont about possibly buying the radiopharmaceutical portion, but those talks have ended, according to Syncor spokesperson Tim Guttman.

"My guess is that (DuPont) would ask too much money for Syncor to buy it," said Sutro analyst Smith.

Whatever the outcome, DuPont has a number of products in the pipeline with promising futures. The company's Definity ultrasound agent is close to receiving FDA approval, according to Lili Gordon, a spokesperson for DuPont's imaging business. Definity was approved in late December in Canada for abdominal and cardiac imaging. Gordon said the company is in discussions with the FDA over its application and expects a "favorable outcome" sometime soon.

Most of DuPont's other well-known products are for nonimaging applications, such as the anticoagulant Coumadin and Sinemet, an anti-Parkinson's drug. The firm's anti-HIV drug Sustiva (efavirenz), a nonnucleoside reverse transcriptase inhibitor, led all retroviral sales last year at $386 million, according to DuPont spokesperson Sandra James. She said the firm is continuing R&D in cardiovascular, virology, neurology, oncology, and inflammation.

By Robert Bruce
AuntMinnie.com contributing writer
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