A Thaw Between Roche And Novartis? What About A Merger?

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Will and work more closely together and even consider a ? Now that both drugmakers have new chairmen – replacing a pair who had famously icy relations – there is increasing talk cooperation and that, in turn, is leading to speculation that a merger could even occur. In fact, a board member earlier this month suggested such a deal might make sense.

Earlier this month, you may recall, Roche named Lufthansa ceo Christoph Franz, who is also one of its board members, to succeed Franz Humer as chairman, a move that came only a few weeks after Jorg Reinhardt replaced the controversial Dan Vasella as Novartis chairman. The proverbial changing of the guard is being viewed as an opportunity to create a new climate the traditional rivals.

“If the right opportunity (for a partnership) comes up, we would be extremely open to talk with Novartis as we would be with all the other players,” Roche ceo Severin Schwann tells The Financial Times. “…It’s opportunity driven. If it makes sense for both companies, why not sit together and talk? It’s a very professional relationship with have Novartis.”

Maybe so, but this was not always the case. More than a decade ago, Vasella, who was also Novartis ceo at the time, engineered a 33 percent stake in Roche, which led to especially frosty relations between the two drugmakers. There were exceptions – pacts were signed to market the Lucentis eye treatment and Xolair asthma medication, both of which were developed by the Genentech unit at Roche.

Initially, Vasella hoped to combine the two drugmakers, but met with resistance. Since then, the stock holding has grown in value as Roche has built on its oncology franchise by acquiring all of the outstanding Genentech shares not previously under its control back in 2009. However, Roche has…Read more

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