About this Author
DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

Chemistry and Drug Data: Drugbank
Chempedia Lab
Synthetic Pages
Organic Chemistry Portal
Not Voodoo

Chemistry and Pharma Blogs:
Org Prep Daily
The Haystack
A New Merck, Reviewed
Liberal Arts Chemistry
Electron Pusher
All Things Metathesis
C&E News Blogs
Chemiotics II
Chemical Space
Noel O'Blog
In Vivo Blog
Terra Sigilatta
BBSRC/Douglas Kell
Realizations in Biostatistics
ChemSpider Blog
Organic Chem - Education & Industry
Pharma Strategy Blog
No Name No Slogan
Practical Fragments
The Curious Wavefunction
Natural Product Man
Fragment Literature
Chemistry World Blog
Synthetic Nature
Chemistry Blog
Synthesizing Ideas
Eye on FDA
Chemical Forums
Symyx Blog
Sceptical Chymist
Lamentations on Chemistry
Computational Organic Chemistry
Mining Drugs
Henry Rzepa

Science Blogs and News:
Bad Science
The Loom
Uncertain Principles
Fierce Biotech
Blogs for Industry
Omics! Omics!
Young Female Scientist
Notional Slurry
Nobel Intent
SciTech Daily
Science Blog
Gene Expression (I)
Gene Expression (II)
Adventures in Ethics and Science
Transterrestrial Musings
Slashdot Science
Cosmic Variance
Biology News Net

Medical Blogs
DB's Medical Rants
Science-Based Medicine
Respectful Insolence
Diabetes Mine

Economics and Business
Marginal Revolution
The Volokh Conspiracy
Knowledge Problem

Politics / Current Events
Virginia Postrel
Belmont Club
Mickey Kaus

Belles Lettres
Uncouth Reflections
Arts and Letters Daily
In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

In the Pipeline

« Run, Do Not Walk, To The Nearest Exit | Main | Instead of Working »

November 22, 2005

Serono's Suitors

Email This Entry

Posted by Derek

If you stopped one hundred people on the street and asked them to name a drug company, I'd be astonished if a single one of them mentioned Serono. But they're one of the largest biotechs in the world, even though their profile is low. Being a privately held (indeed, family-owned) concern surely has something to do with that, because if people can't talk about your stock, they often don't talk about your company.

Serono has been around for about a century, and for a long time they made their living in hormones and fertility treatments (some of which were extracted directly from urine, which must have been a joyful task). They really took off though, in the last ten years, making the current family CEO Ernesto Bertarelli one of the hundred wealthiest people alive. Their recent growth has been due to Rebif, a recombinant beta-interferon for multiple sclerosis, but before that one of their big products was Serostim.

And that's one part of the company history they'd like to forget. Serostim is a growth hormone preparation approved in 1996 for treatment of HIV-related wasting. But newer antiretroviral drugs came on the market very soon after that and AIDS wasting became less of an issue (in fact, some of the HIV protease inhibitors are well known for redistributing and perhaps even adding body fat). Serono fought back, as any company would, but they comprehensively crossed the line.

Their first tactic was to promote a medical device to measure wasting in HIV patients, which gizmo (wouldn't you know) indicated that people needed Serostim even though they looked fine. The idea was, er, that their cells were losing mass, even though their outward appearance might not indicate it. Another campaign tried to promote the same device (and Serostim) to diagnose and treat the adipose effects of the retroviral drugs. Neither were approved for such a use, as you might well have guessed. And their third method was more to the point: to flat-out pay physicians for the number of Serostim prescriptions they wrote, in one notorious case by picking up the tab for a free vacation in the south of France.

The company recently settled with the US government, agreeing to their guilt and paying $725 million in fines. It's worth noting that the whole scheme was done in by five employees with knowledge of the matter, who will now share some $50 million of the fine under Federal whistleblower statutes. (This seems to be a perfect example of what the law was designed to do).

So having put this behind them, Serono finds themselves in the position of several other companies over the years, with most of their revenue coming from a single product and not much else looking fit to replace it. And, as some other companies have done in such times, they've called in the investment bankers.

But I'm not sure who's going to line up to buy them. Right now, you'd be getting Serono for nearly the highest price it's ever commanded. If someone decides that they want Rebif for the rest of its patent life, that would be the best reason I could think of to go ahead with a deal. . .of course, it would have to be someone with a huge marketing arm and the conviction that they could make more money than Serono could with the stuff, which I'd guess narrows it down even more to companies whose names start with a silent "P".

Comments (3) + TrackBacks (0) | Category: Drug Industry History | The Dark Side


1. Jane on November 22, 2005 10:00 PM writes...

I heard about this advertising scheme on a another blog, that gives away free Apple ipods. It sounded like a scam, but after I googled it, it was legitmiate. You have to sign up for an offer from one the sponser companies. This is for the new video ipod! Here's the link, check it out.
Video Ipod

Permalink to Comment


Email this entry to:

Your email address:

Message (optional):

The Last Post
The GSK Layoffs Continue, By Proxy
The Move is Nigh
Another Alzheimer's IPO
Cutbacks at C&E News
Sanofi Pays to Get Back Into Oncology
An Irresponsible Statement About Curing Cancer
Oliver Sacks on Turning Back to Chemistry