Novo may buy back shares with ZymoGenetics proceeds-INTERVIEW

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Friday September 10, 2010 01:56:11 AM GMT

* Novo sees $188 mln in proceeds from 26 pct stake sale

* CFO says to expect share buyback or dividend

* CFO: sales of other minority stakes not on the cards

By Anna Ringstrom

COPENHAGEN, Sept 8 (Reuters) - Danish diabetes drugmaker Novo Nordisk may use proceeds from the sale of its stake in biotech firm ZymoGenetics to buy back shares, its chief financial officer said on Wednesday. Novo Nordisk said on Wednesday it had signed a deal to sell its near 26 percent stake to Bristol-Myers Squibb and expects proceeds of 1.1 billion crowns ($188 million).

BMS had revealed a day earlier that it planned to buy ZymoGenetics and had the support of around 37 percent of the target company's shareholders.

"We continue to have adequate funds and a steady cash flow. Without pre-empting the evaluation that we will do together with the board, I can say that we have a long tradition of returning excess cash to shareholders in the form of dividends and share repurchases," Chief Executive Officer Jesper Brandgaard told Reuters.

"Everything else being equal, one should also expect that this will be the case in this instance," he said, drawing a parallel with a previous sale.

"When Novo in 2007 divested its holding in (cancer diagnostics firm) Dako, the 1.5 billion crowns in proceeds were returned to shareholders in the form of a share buyback programme."

Novo has an ongoing 8.5 billion crowns share repurchasing programme.

"Assuming the deal gets the necessary approvals and is finalised, it will be the fourth quarter of 2010 before we can book the proceeds. We will provide our expectations on what to do with the proceeds in the full-year report on Feb. 2," Brandgaard said.

Novo has said ZymoGenetics, which focuses on developing therapeutic proteins, is not a strategic holding.

Brandgaard said Novo's minority stakes in other companies were not for sale: "We have no current plans to divest any other minority holdings, which are of a much smaller nature. This was the big one." (Editing by Will Waterman)

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