Bayer and Novartis Reach Agreement About "Betaseron"

Berlin and Basel, Switzerland (Mar. 26)-Ending their talks about the rights to a leading multiple-sclerosis therapy, Bayer Schering Pharma AG (www.bayer.com) and Novartis (www.novartis.com) reached a deal for “Betaseron.”

The agreement reached by both companies gives Novartis the opportunity to introduce its own branded version of interferon beta-1b in the first half of 2009.  Bayer will support Novartis in the regulator-filing process for Novartis’s version of the drug and will assume manufacturing responsibility for interferon beta-1b for both Betaseron and Novartis’s drug. In return, Novartis will pay Bayer a double-digit royalty payment after the drug is introduced in 2009.

The manufacture of interferon beta-1b will take place at a biologics manufacturing facility in Emeryville, California, which Bayer recently purchased from Novartis. Betaseron already is produced at the plant. Bayer also plans to lease buildings at the Emeryville site for approximately $110 million.

Bayer will continue to pay Novartis royalties on net sales of Betaseron until the original regulatory filing, development, and supply agreement ends in October 2008.

The battle over the drug began when Novartis acquired Chiron and Chiron’s rights to Betaseron in 2006. Bayer had signed an agreement covering the regulatory filing, development, and supply of Betaseron with Chiron in 1993.