Your Money : Swedish Drug Company Astra Forms Venture With Merck

Astra, a big Swedish pharmaceuticals company, and U.S. drug manufacturer Merck & Co. are solidifying a 12-year partnership by forming a joint-venture company that will sell drugs and health care services in the United States.

Astra said Tuesday that it has paid $820 million to Merck for a 50% stake in the new company, Astra Merck Inc., which will replace a Merck subsidiary with the same name.

The new venture, similar to many mergers and business alliances now proliferating in the health care industry, guarantees Merck access to new drugs and gives Astra access to Merck’s U.S. marketing skills.

Since 1982, Merck has had a license to manufacture and market Astra products in the United States. The most successful is Prilosec, an ulcer drug with sales of $684 million in the first nine months of this year. Others include Plendil, a drug for high blood pressure, and Tonocard, for irregular heartbeats.

The Merck subsidiary that produced and sold the drugs is headquartered in Wayne, Pa., and employs 900 people.

Under the 1982 agreement, once sales of Astra drugs reached a certain point, Merck would create a separate entity. Astra’s decision to invest the money in the company triggered the creation of the new Astra Merck Inc.

Astra, with $2.8 billion in sales last year, is one of Sweden’s largest companies, but it is dwarfed by Merck, which had sales of $10.5 billion.

Wayne P. Yetter, the Merck executive who has run the Astra Merck subsidiary, will become president and chief executive of the new company. A separate board will be made up of eight members, four from Merck and four from Astra.

In a statement, Astra Merck said that, in addition to drugs, it will concentrate on information, education and services to customers.

Astra Merck recently licensed Ambicin from Applied Microbiology Inc. The drug is designed to kill a bacteria believed to cause some ulcers.

Astra will continue to run a separate 350-employee U.S. division, selling products and drugs not covered in the joint venture.

Merck shares closed up 12.5 cents at $35.75 on the New York Stock Exchange.