CSL subsidiary strikes agreement with Novartis

CSL's (ASX: CSL) Swiss subsidiary has struck a deal with drug company Novartis over the marketing and distribution of its intravenous immunoglobulin product.

ZLB Bioplasma will take over marketing of Sandoglobulin from next month, when the existing distribution agreement with Novartis is due to expire.

Under the new arrangements, ZLB will directly distribute the product through its own network of affiliates in the United Kingdom, Germany and Belgium, followed by other countries.

ZLB president Peter Turner described the move as an exciting time for the company.

This agreement pushes us further down the path to fulfilling one of our key objectives of becoming a fully integrated biopharmaceutical company and therefore better positioned to meet customer needs," Turner said.

According to the agreement, Novartis will transfer all product registrations for Sandoglobulin and Sanglopor, as well as licensing the exclusive, worldwide (excluding the United States) trademarks for both products to ZLB.

In its announcement, the company said that the transfers would be organised on a country-by-country basis over the coming months to avoid disruptions to supply.

In exchange for the licences and transfers, the Swiss groups is to make an upfront payment of 15 million Swiss francs, with subsequent payments of 20 million Swiss francs as product registrations are transferred in various countries.

ZLB will also pay aggregate royalties of 19.6 million Swiss francs for the use of the trademarks, with the company eventually taking full ownership from 2007.

In the US, ZLB's marketing affiliate ZLB Bioplasma Inc will market the intravenous immunoglobuilin product branded there as Carimune.

The market announcement said that the expiry of the Novartis collaboration with ZLB marked the end of a 20-year relationship between the two companies.