The acquisition will significantly broaden Schering-Plough's therapeutics footprint with little or no overlap between the two companies portfolios. The pharma-giant's pipeline will be significantly enlarged to nine NMEs in late stage development and will allow it to reduce its reliance on the anti-cholesterol market.

In addition to the NMEs, Schering-Plough has a series of line extensions and new formulations in Phase III trials to support their current product lines.

The current drug offerings and pipelines appear to be a very good fit with little or no overlap. The company has stated it plans to look for $500m (€380m) of savings over the next three years with administration and overheads under the most scrutiny and at the moment it is unclear how R&D will be affected.

During a press conference on Monday, Fred Hassan, CEO of Schering-Plough, said: "the R&D is really very good, but there will be some trimming and rationalisation of the portfolio."

Schering-Plough, with annual sales of $12.5bn in 2005, is nearly five times as big as Organon, making the pipeline contribution even more impressive. The R&D expenditures of the companies, as a fraction of total revenues also compare favourably.

While Schering-Plough's current strengths lie in therapies for cholesterol, allergic rhinitis, oncology, and anti-infectives, Organon's strengths lie in hormone therapies, antidepressants and anaesthesia. Organon is currently the third largest supplier of contraceptives worldwide.

Schering-Plough's late stage pipeline currently contains four NMEs::

* golimumab (CNTO 148), an anti-TNF-alpha human antibody therapy for indication in rheumatoid arthritis and inflammatory diseases;

* Sarasar (lonafarnib), an oral farnesyl transferase inhibitor (FTI) for use us an oncology therapeutic;

* garenoxacin, a broad-spectrum quinolone antibiotic for the treatment of Gram+/Gram- bacterial infections;

* a sublingual tablet-based immunotherapy, for grass pollen allergies rhinitis,

Organon's pipeline contains five new NMEs:

* NOMAC/E2, a progestagen/oestrogen oral contraceptive;

* Org 36286 (corifollitropin alfa) a sustained follicular stimulant recombinant s

fertility hormone;

* Org 50081, a serotonin-2-blocker, for indication in insomnia and hot flushes;

* Sugammadex (Org 25969), a selective relaxant binding agent for the reversal of neuromuscular blockade by rocuronium;

* asenapine, a serotonin (5-HT2A-) and dopamine (D2-) receptor antagonist for the treatment of schizophrenia and bipolar disorder.

In November 2006, Pfizer pulled out of a collaboration to co-develop asenapine although Organon is still pursuing its development.

Reaction

Analyst reaction to the move has been mainly positive, although Standard and Poor's (S&P) Ratings Services said the acquisition has had negative implications on the companies rating, which has been switched to 'CreditWatch' due to the 'significant' amount of debt likely to be incurred. However, they believe the company will work quickly to restore its financial profile.

"Considering the strength of Schering-Plough's business profile, we believe that the corporate credit rating has the potential to remain at the investment-grade level," said Arthur Wong S&P credit analyst.