Schering-Plough and Bayer Form Alliance

Struggling pharmaceuticals company Schering-Plough Corp. and German chemical and drug maker Bayer have formed an alliance under which Schering-Plough will take over U.S. marketing of Bayer’s primary care medicines.

The partnership, announced Monday, could give Bayer a bigger presence in the world’s biggest drug market while offering Schering-Plough badly needed new products to sell and a potentially key marketing partner for some of its drugs in Europe and Japan.

Under the alliance, Kenilworth, N.J.-based Schering-Plough’s 3,500 salespeople will take over U.S. marketing of Cipro and Avelox, both broad-spectrum antibiotics for respiratory and skin infections, plus the blood pressure drug Adalat and some small established primary care drugs. Schering-Plough’s sales force also will handle U.S. promotion of Bayer’s impotence treatment Levitra.

“Schering-Plough needs product, and this is a way of getting that temporarily until they can develop their own,” said drug industry analyst Mike Krensavage of Raymond James & Associates. “Bayer certainly could use the marketing assistance of Schering-Plough.”

Schering-Plough said the partnership, expected to become effective Oct. 1, would slightly reduce earnings for the rest of 2004, partly because of integration and transition costs, then would add slightly to earnings starting in 2005.

The primary care products will remain the property of Bayer and continue to be sold under the Bayer brand name.

Schering-Plough will pay a “substantial royalty” to the German company on net sales of the products, a Schering-Plough spokesman said.

Schering-Plough shares fell 11 cents to $19.10 on the New York Stock Exchange. U.S.-traded shares of Bayer rose 47 cents to $26.39, also on the NYSE.