Shareholders of Swiss biotechnology company Serono have given the go-ahead to a capital share increase to fund future acquisitions.This content was published on April 25, 2006 - 18:28
After abandoning plans to find a buyer for the firm, Serono had announced it was seeking a war chest to plug gaps in its product pipeline.
Shareholders approved the move on Tuesday at their annual general meeting, although it was a foregone conclusion. The family of chief executive Ernesto Bertarelli owns 62 per cent of the company.
The plans calls for the issuing of 7.6 million new shares, which at current market values are worth $5 billion. Serono has said it would spend up to $10 billion on potential deals.
Last week, Bertarelli said the company would aggressively seek acquisition targets or in-licensing deals in coming months to reduce reliance on its multiple sclerosis drug Rebif and keep ahead in an increasingly competitive industry.
"My view is that we are not a small biotech company so we cannot hide form all the issues that big pharma is facing right now," he added. "Clearly we are in a storm that we have to ride."
"It is clear we cannot stand still," Bertarelli said, noting that the firm - Europe's biggest biotech company -- faced the same cost and price pressures as larger pharmaceutical companies.
In terms of acquisition targets, Serono's CEO said the firm would not aggressively pursue current partners, but that it would consider all other options, including mid-sized pharmaceutical firms.
Earlier this month, Serono confounded the stock market after ditching plans to find a buyer in favour of raising funds to fuel a new "risky" expansion policy.
In November, the firm had announced that Goldman Sachs had been retained to explore "strategic alternatives" for the company.
Britain's GlaxoSmithKline is believed to have considered a bid after an auction in January failed to find a buyer for the $15 billion asking price, but like Basel's Novartis, found Geneva-based Serono too rich for its taste.
swissinfo with agencies
Serono is in the business of developing proteins, antibodies and small molecules to treat serious medical conditions.
It is active in the following therapeutic areas: neurology, reproductive health and growth hormones.
Its leading product is the drug Rebif, which treats multiple sclerosis; worldwide sales reached nearly $1.3 billion in 2005.
Total revenues in 2005 increased by 5.2 per cent to $2.586 billion, of which sales were $2.339 billion.
Serono was founded in 1906 in Rome by Cesare Serono and was originally called the Serono Pharmacological Institute.
The company first made its mark producing fertility drugs.
In 1977 the company was moved to Geneva by then chief executive Fabio Bertarelli.
Current CEO Ernesto Bertarelli took charge in 1996.
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