Wednesday 22 November 2017

Teva ditches Mylan in €36bn Allergan deal

A syringe rests alongside a vial of Allergan Botox, produced by Dublin-headquartered Allergan
A syringe rests alongside a vial of Allergan Botox, produced by Dublin-headquartered Allergan

Tova Cohen

Israeli drug firm Teva has agreed to buy Dublin-headquartered Allergan's generic drugs business for £26.1bn (€36.6bn) in a cash and stock deal that will turn Teva into one of the world's largest pharmaceutical companies.

The deal, the largest in Israel's corporate history, prompted Teva to drop its $40bn (€36.1bn) hostile bid for Mylan.

That takeover bid had hit a snag when a Dutch foundation linked to the target bought temporary control of half the company in an attempt to block the takeover.

Teva employs over 500 people in Ireland, at facilities in Waterford and Dundalk. It is the largest supplier of prescription medicines in Ireland.

The planned takeover will allow Allergan, the third-largest generic drugmaker in the United States, to focus on branded drugs and pay down its debt.

"Allergan's business is more high-end (than Mylan's). It's a more interesting business... a profitable business and it's well managed," said Gilad Alper, an analyst at brokerage Excellence Nessuah, noting a "friendly deal" is preferable to a hostile one.

Allergan's generic business is seen as a better fit than Mylan because it will improve Teva's distribution channels, and because Allergan is strong in so-called biosimilar drugs, as well as injectables, and has a presence in India. Pressure has been growing on Teva, already the world's biggest generic drugmaker, to find new revenue sources to combat the start of competition this year for its multiple sclerosis drug Copaxone. Copaxone accounted for about half of Teva's $5.7bn profit last year.

The acquisition is the latest in an unprecedented wave of healthcare deals since the start of 2014, stretching from large drugmakers buying up smaller rivals, to consolidation among makers of generic medicines, to tie-ups between insurers.

Global healthcare merger and acquisition activity so far this year has reached $398.5bn, up 80pc on the same period a year ago. (Reuters)

Irish Independent

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