April 9 (Bloomberg) -- Bidding for Nycomed A/S, the Swiss drugmaker put up for sale by its private-equity owners, may be limited by the company’s dearth of new medicines.

Nycomed, controlled by Nordic Capital and a buyout unit of Credit Suisse Group AG, is targeting as much as 10 billion euros ($13.4 billion) from a possible sale after the financial crisis soured plans for an initial public offering, a person familiar with the situation said last month. The Zurich-based company has hired Goldman Sachs Group Inc. to explore a divestment as the buyout firms seek a return on the 2006 purchase of Altana AG’s drug unit, two people familiar with the matter said.

Nycomed is seeking a marketing partner to promote U.S. sales of Daxas, the company’s drug for smoker’s cough, which is about to be submitted for regulatory approval. Nycomed needs Daxas to offset sales that the company will lose when patent protection expires for its Pantoprazole heartburn remedy. That medicine is Nycomed’s best-selling product in a portfolio that lacks more promising treatments, said Olav Zilian, an analyst at Helvea SA in Geneva.

“It’s got cash but too few drug candidates,” said Zilian in a March 24 interview.

Nycomed gained Daxas through the 4.5 billion-euro purchase of the Altana business. The drug, the first in a new class of so-called PDE4 inhibitors, was designed to treat the respiratory condition known as chronic obstructive pulmonary disease, an illness that mostly afflicts smokers and can cause emphysema, bronchitis and asthma. The medicines relieve symptoms by targeting the inflammation process behind COPD compared with standard inhaled bronchial dilator treatments.

Seeking Approval

Nycomed plans to submit Daxas to U.S. and European drug regulators this year after an analysis of four late-stage clinical trials in October showed it reduced the rate of breathing attacks and improved lung function.

The submission will be the second attempt at gaining approval after regulators in 2005 asked for more tests. New York-based Pfizer Inc. withdrew as a partner in the U.S. to pursue an alliance with Boehringer Ingelheim GmbH, which sells the competing Spiriva medicine.

The setbacks prompted Altana to sell its drug business. Nycomed bought the unit for 4.5 billion euros in 2007 after Altana had spent 11 months trying to find a buyer.

Nycomed has done additional tests on patients with severe COPD to alleviate regulators’ concerns about its effectiveness.

“We are looking for a partner for Daxas in the U.S. and a sale is completely up to our owners,” Tobias Cottman, a Nycomed spokesman, said in a telephone interview.

Possible Bidders

Nycomed may draw interest from drugmakers seeking to expand in respiratory diseases, including Paris-based Sanofi-Aventis SA and London-based AstraZeneca Plc, as well as Eli Lilly & Co. and Merck & Co. of the U.S., one person familiar with the situation said. Novartis AG, which sells the Xolair asthma drug, and Teva Pharmaceutical Industries Ltd, the world’s largest generic-drug maker, may also be interested, another person said.

London-based GlaxoSmithKline Plc may see potential in Daxas, according to Andy Smith, a fund manager at AXA Framlington in London. Glaxo’s top-selling product is the Advair Diskus asthma inhaler.

The treatment “would fit in well with GSK as they seem to be very aggressive in the respiratory space,” Smith said.

Eric Althoff, a spokesman for Basel, Switzerland-based Novartis, declined to comment as did Ayala Miller, a spokeswoman for Petah Tikva, Israel-based Teva. Glaxo’s David Outhwaite, AstraZeneca’s Chris Sampson, Sanofi’s Jean-Marc Podvin and Merck’s Amy Rose also declined to comment. Lilly spokesman Mark Taylor wasn’t available for comment.

Killer Disease

COPD kills more than 3 million people globally each year, including 120,000 in the U.S., according to Glaxo. Patients, mostly cigarette smokers, develop blockages in their airways that can worsen over time, leading to respiratory failure.

“It’s an unmet medical need and the number of patients that will need treatment should rise in the years to come,” said Ulrich Huwald, an analyst at MM Warburg in Hamburg.

A price of 10 billion euros would be almost 10 times 2008 earnings, a bigger multiple than Pfizer Inc. is paying to buy Wyeth. Nycomed, which had revenue of 3.4 billion euros last year, gets more than one-third of its sales from Pantoprazole. The drug is set to lose patent protection in Europe this year and in the U.S. in 2010.

Sales in the U.S., where Wyeth markets the medicine under the name of Protonix, have fallen more than 50 percent since Teva and Sun Pharmaceutical Industries Ltd. started selling so- called at-risk generic versions before the patent expires. Nycomed and Wyeth, in response, began marketing their own so- called authorized generic to stem the loss of sales.

Immunomedics Deal

The Swiss company, which also offers medicines to treat asthma, pain and inflammatory diseases as well as over-the- counter drugs, bought rights to an experimental rheumatoid arthritis therapy from Immunomedics Inc. last year. In January, it purchased a license to sell an effervescent version of the Alendronate osteoporosis treatment from Florida-based EffRx Inc.

Nycomed is testing buyer interest amid a wave of takeovers sweeping through the industry. Pfizer Inc. agreed in January to buy Wyeth for $64.2 billion. Six weeks later, Merck & Co. of Whitehouse Station, New Jersey, said it would buy Kenilworth, New Jersey-based Schering Plough Corp. for $41.1 billion.

Switzerland’s Roche Holding AG last month completed its $46.8 billion acquisition of the part of Genentech Inc. it didn’t already own.

“There will be a couple more acquisitions, but they will only be of companies that offer pipelines, which the big companies need, or of a company with a focus on a special indication area that could round up the portfolio,” said Birgit Kulhoff, an analyst at Rahn & Bodmer in Zurich. “But Nycomed doesn’t really fit either of those areas.”

Nycomed was founded in Norway in 1874 by pharmacist Morten Nyegaard as an agent for imported pharmaceutical products. The company has changed hands repeatedly over the past 12 years, moving in the process from Norway to Denmark and then, in 2007, to Switzerland.

To contact the reporter on this story: Dermot Doherty in Geneva at ddoherty9@bloomberg.net

Last Updated: April 8, 2009 18:01 EDT