If you stopped one hundred people on the street and asked them to name a drug company, I'd be astonished if a single one of them mentioned Serono. But they're one of the largest biotechs in the world, even though their profile is low. Being a privately held (indeed, family-owned) concern surely has something to do with that, because if people can't talk about your stock, they often don't talk about your company.

Serono has been around for about a century, and for a long time they made their living in hormones and fertility treatments (some of which were extracted directly from urine, which must have been a joyful task). They really took off though, in the last ten years, making the current family CEO Ernesto Bertarelli one of the hundred wealthiest people alive. Their recent growth has been due to Rebif, a recombinant beta-interferon for multiple sclerosis, but before that one of their big products was Serostim.

And that's one part of the company history they'd like to forget. Serostim is a growth hormone preparation approved in 1996 for treatment of HIV-related wasting. But newer antiretroviral drugs came on the market very soon after that and AIDS wasting became less of an issue (in fact, some of the HIV protease inhibitors are well known for redistributing and perhaps even adding body fat). Serono fought back, as any company would, but they comprehensively crossed the line.

Their first tactic was to promote a medical device to measure wasting in HIV patients, which gizmo (wouldn't you know) indicated that people needed Serostim even though they looked fine. The idea was, er, that their cells were losing mass, even though their outward appearance might not indicate it. Another campaign tried to promote the same device (and Serostim) to diagnose and treat the adipose effects of the retroviral drugs. Neither were approved for such a use, as you might well have guessed. And their third method was more to the point: to flat-out pay physicians for the number of Serostim prescriptions they wrote, in one notorious case by picking up the tab for a free vacation in the south of France.

The company recently settled with the US government, agreeing to their guilt and paying $725 million in fines. It's worth noting that the whole scheme was done in by five employees with knowledge of the matter, who will now share some $50 million of the fine under Federal whistleblower statutes. (This seems to be a perfect example of what the law was designed to do).

So having put this behind them, Serono finds themselves in the position of several other companies over the years, with most of their revenue coming from a single product and not much else looking fit to replace it. And, as some other companies have done in such times, they've called in the investment bankers.

But I'm not sure who's going to line up to buy them. Right now, you'd be getting Serono for nearly the highest price it's ever commanded. If someone decides that they want Rebif for the rest of its patent life, that would be the best reason I could think of to go ahead with a deal. . .of course, it would have to be someone with a huge marketing arm and the conviction that they could make more money than Serono could with the stuff, which I'd guess narrows it down even more to companies whose names start with a silent "P".