BioWorld International Correspondent

The first weeks of 2006 will determine whether Crucell NV will succeed in its bid to become what it claims would be the world's largest independent vaccine player through its bid for Berna Biotech AG.

The deal, agreed to the respective managements of the two companies and disclosed publicly Dec. 1, was seriously imperiled leading up to Dec. 25, when Berna acceded to a due diligence request from Novartis AG in advance of a possible offer for the company.

Jan. 17 is the latest date at which Basel, Switzerland-based Novartis can make an offer for Berne, Switzerland-based Berna Biotech, Patrik Richard, corporate secretary at the latter company, told BioWorld International. Swiss Stock Exchange rules require any competing bid to be published three days prior to the end of the offer period. "It's up to Novartis now to decide what they are doing," he said.

Berna Biotech shareholders are meeting Jan. 11, but they will not vote directly on the Crucell offer.

"There will be no vote on the Crucell bid. There will be a vote on whether the company still wants to stand alone or have a collaboration," Richard said. The company's articles of association include a provision that no single shareholder can have voting rights in excess of 5 percent, regardless of the size of the stake. That was inserted to prevent a hostile takeover of the company. Its removal would pave the way for a Crucell bid. Shareholders also will vote on a second resolution to add three Crucell nominees to the Berna Biotech board.

Any bid from Novartis would be cash, several analysts said, and therefore would likely trump Crucell's all-share offer, which was originally valued at CHF591 million (US$449.4 million).

The Swiss giant already has had a highly acquisitive year, committing more than $14 billion in cash on a string of acquisitions, of which $5.1 billion has been earmarked for gaining outright ownership of Chiron Corp., of Emeryville, Calif. It also has been identified as one of several potential bidders for Geneva-based Serono SA, which comes with a potential asking price of about $15 billion. "We haven't confirmed or denied our interest in Serono," said Novartis spokesman John Gilardi.

Novartis has enough money to view the cost of Berna Biotech as loose change.

"They would probably look on this as a missed opportunity, if they let it pass by," said analyst Karl Heinz Koch, of Lombard Odier Darier Hentsch in Geneva.

Novartis said in a prepared statement that it might be interested in acquiring Berna Biotech because of the complementary geographic and product coverage a combination with Chiron would offer, and because it also would gain access to Berna's platform technologies.

Koch said the deal would give Novartis entry in the therapeutic antibody and vaccine space. Berna Biotech in 2002 established Berne-based Pevion Biotech AG, a 50/50 joint venture with Bachem AG, of Bubendorf, Switzerland, which has an antibody platform, as well as a virosome-based vaccine technology.

Crucell, Koch said, would find it difficult to handle a competing bid. Any attempt to increase the offer probably would be offset by downward pressure on its shares.

"That's a limiting factor in itself. This sort of company can't compete against cash," he said.

Marcel Wijma, of Van Leeuwenhoeck Research, in Voorhout, the Netherlands, said the Novartis move most likely is defensive, to prevent Crucell from acquiring the company and challenging Chiron's influenza vaccine franchise.

"If you look at the pipeline and product portfolio of Berna, I don't think that would be very interesting for Novartis to have," he said. Sentiment might play a role in the outcome. Swiss investors might prefer to see Berna Biotech remaining under Swiss control.

"It could be that psychology will prevail, and Swiss shareholders would go for a Swiss deal," Wijma said.