Zeneca Expands Into Health-Care Services With Salick Purchase

February 1, 1995

WILMINGTON, Del--Zeneca Group PLC, London, the parent company of Zeneca Pharmaceuticals, has entered into an agreement to purchase a 50% interest in Salick Health Care, Inc., Los Angeles, a provider of health-care services to patients with cancer and other complex illnesses. It may be the first time a pharmaceutical company has purchased a health-care provider.

WILMINGTON, Del--Zeneca Group PLC, London, the parent companyof Zeneca Pharmaceuticals, has entered into an agreement to purchasea 50% interest in Salick Health Care, Inc., Los Angeles, a providerof health-care services to patients with cancer and other complexillnesses. It may be the first time a pharmaceutical company haspurchased a health-care provider.

Under the agreement, Salick would become a separate company withinthe Zeneca Group and the existing Salick management team wouldremain in place, with Bernard Salick, MD, staying on as chairman,CEO, and president.

Zeneca Group PLC is a $6.5 billion international bioscience company.Its products include the anticancer agents tamoxifen (Nolvadex)and goserelin (Zoladex). Salick operates 10 comprehensive cancercenters in the United States and, through subsidaries, providesdialysis, infusion, and nutritional services.

SalickNet, Inc., a managed care subsidiary, provides cancer care(and care for other catastrophic diseases) to health-care purchasers.In 1994, SalickNet signed the first contract of its kind to provide"carve out" capitated cancer care for an HMO in SouthFlorida.

The alliance with Salick represents an important expansion ofZeneca services to managed care organizations, oncologists, otherspecialists, and patients. The company is already active withother US managed care customers. Last year, it established itsown primary care disease-management subsidiary, Stuart DiseaseManagement Services, Inc. (SDMS), which focuses on cardiovasculardisease.

Robert C. Black, president of Zeneca Pharmaceuticals, told OncologyNews International that, although SalickNet and SDMS share manysimilarities, the nature of the products they offer differs.

"Salick is taking a provider-based approach to cancer andis actively involved in caring directly for patients," hesaid. "SDMS is different in that it supports third-partyproviders through the provision of tools and resources to managedisease--initially cardiovascular conditions--and does not intendto get directly involved in the provision of care in the nearfuture."

Both entities are actively entering into capitated contracts withmanaged care organizations for their disease management products.However, Mr. Black said, SalickNet has the capability, throughits contacts with Salick Health Care, to offer payers an essentiallycomplete "carve out" of cancer costs. SDMS does nothave plans at this stage to establish networks of providers toachieve a similar "carve out" of its target conditions,he said.