Generics giant formed as Teva acquires Barr
pharmafile | July 24, 2008 | News story | Sales and Marketing |Â Â genericsÂ
Teva is to buy rival firm Barr for $7.5 billion to create a new giant in the global generics industry.
Teva is already the world's biggest generics company, and the acquisition of Barr, the fourth largest player, means the merged corporation will have unprecedented scale and reach for a generics company.
The merged companies will have a combined turnover of $11.9 billion, and presence in 60 countries and employ 37,000 people worldwide. The move will strengthen Teva's position in North America and western Europe, where 80% of its sales are already, while extending its reach into central and eastern Europe.
It will also improve the manufacturer's pipeline, giving Teva more 'Paragraph IV' opportunities, and provide more balance to the business – adding Barr's women's health products to Teva's respiratory franchise.
The deal, in which Teva acquires 100% of the shares for $7.46 billion and takes on Barr's outstanding net debt of $1.5 billion, is expected to go through later this year.
The expansion of Teva's product portfolio and pipeline sees the combined entity boasting 500 currently marketed products; it will also have more than 200 abbreviated new drug applications (ANDAs) pending with the FDA with annual brand sales of more than $120 billion, including 70 or so first-to-file Paragraph IV challenges. There are also approximately 3,700 product registrations pending with other regulatory authorities worldwide, primarily in Europe.
"The acquisition of Barr will elevate Teva's market leadership to a new level," says Shlomo Yanai, president and chief executive of Teva.
"The combination of our two companies provides an outstanding opportunity strategically and economically: it will enhance our market share and leadership position in the US and key global markets, further strengthen our portfolio and pipeline, and provide upside to our strategic plan, by allowing us to exceed our 20/20 goals for 2012."
That plan was to double revenue by 2012 to $20 billion with net income margins of at least 20%.
The transaction will generate $300 million in annual savings within three years, says Teva, and will continue to provide additional cost savings beyond 2011. Barr chairman and chief executive Bruce Downey said Teva would benefit from Barr's portfolio of generic and proprietary products, which includes the company's biologics capabilities as well as its substantial women's health portfolio.
Earlier this year Teva was thwarted by a US court as it tried to file a rival product to AstraZeneca's blockbuster schizophrenia and bipolar disorder drug Seroquel.
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