Monsanto Extends Pharmaceutical Joint Venture with Synthelabo, to Sell Stake in 2002

Strategic Insights -

Monsanto Co. has decided to extend its pharmaceutical joint venture, Lorex Pharmaceuticals, with France's Synthelabo until April 2002. The joint venture was initially set to expire at the end of 1999. Lorex Pharmaceuticals has seen moderate success with its insomnia drug Ambien, which generated $396 million in sales last year. Despite the success of Ambien, the joint venture has not played a significant role in Searle's long-term plans for developing drugs to treat arthritis, women's health, cancer, and heart disease.

Key Takeaways:

  • The joint venture, Lorex Pharmaceuticals, was formed in 1982 between France's Synthelabo and G.D. Searle & Co., which was later acquired by Monsanto in 1985.
  • Lorex has produced one hit, the insomnia drug Ambien, which had $396 million in sales last year.
  • The joint venture was originally set to expire at the end of 1999 but has been extended until April 2002.
  • Under the new agreement, Synthelabo will get all of Lorex's profit after the joint venture ends in 2002.
  • Searle, which owns 51 percent of Lorex, will get 90 percent of Lorex's profit until the joint venture ends in 2002.
  • Synthelabo gets a larger piece of profits each year, culminating in 100% ownership after the joint venture expires.
  • Lorex also developed two blood-pressure drugs, but one was never marketed, and the other, Kerlone, has produced tiny sales.
  • Work on an anxiety-disorders drug was canceled in 1992 due to poor test results.

Statistics:

  • $396 million: Sales generated by Lorex Pharmaceuticals' insomnia drug Ambien, last year.
  • 1982: Year when the joint venture Lorex Pharmaceuticals was formed between France's Synthelabo and G.D. Searle & Co.
  • 1985: Year when Monsanto acquired G.D. Searle & Co.
  • 51 percent: Searle's ownership share of Lorex Pharmaceuticals.
  • 90 percent: Searle's profit share of Lorex Pharmaceuticals until the joint venture ends in 2002.
  • 100 percent: Synthelabo's profit share of Lorex Pharmaceuticals after the joint venture ends in 2002.
  • 1992: Year when work on an anxiety-disorders drug was canceled due to poor test results.

Sources:

  • [“Monsanto and Synthelabo Agree to Extension of Pharmaceuticals Joint Venture,” Reuters, (undated)]
  • [“Monsanto to Sell Stake in Joint Venture to Synthelabo,” Bloomberg, (undated)]
  • [“Lorex Pharmaceuticals: A Joint Venture Between Monsanto and Synthelabo,” Monsanto Press Release, (undated)]