Mylan buys Abbott generics
pharmafile | July 15, 2014 | News story | Manufacturing and Production, Sales and Marketing | Abbott, Mylan, generics, new mylan
Abbott is to sell the portion of its branded generics business which operates in developed markets such as Europe to Mylan, where it will be incorporated into a new entity in the first quarter of 2015.
Mylan will add Abbott’s business – which operates in Europe, Japan, Canada, Australia and New Zealand, has 3,800 staff and generated around $2 billion in sales in 2013 – to its existing operations and create a new company which will be based in the Netherlands.
Abbott will have 105 million shares – about 21% – in ‘New Mylan’, which represents a value of approximately $5.3 billion based on Mylan’s recent closing stock price.
In a complex deal aimed in large part at lowering Mylan’s tax bill, ‘New Mylan’ will become the parent company of Mylan: this new public company will be called Mylan – and will be led by the current Mylan leadership team from an HQ in Pittsburgh.
Mylan executive chairman Robert Coury says the move positions the firm for the next phase of growth “through enhanced financial flexibility and a more competitive global tax structure”.
The Abbott portfolio being acquired by Mylan/New Mylan comprises 100 or so products in five therapy areas: cardio/metabolic, gastrointestinal, anti-infective/respiratory, CNS/pain and women’s and men’s health.
Mylan thinks this will offer another $1.9 billion in annual additional revenues, and expects pro forma 2014 sales of around $10 billion as a result: an added attraction is that it will have the effect of diversifying the company’s business and beefing up its operations outside the US.
Chief executive Heather Bresch says: “We targeted this differentiated business with a complementary portfolio of attractive speciality and branded generic products, many of which have strong continued growth potential.”
For its part, Abbott “does not expect to be a long-term shareholder in Mylan” and is going to put the net proceeds from the deal into other areas – and it will also keep hold of its branded generics portfolio in emerging markets, which had 2013 sales of $2.9 billion.
“This transaction provides Abbott with additional strategic flexibility as we continue to actively manage and shape our portfolio, reflecting our commitment to long-term, durable growth,” says Miles White, Abbott’s chief executive.
“Our branded generics pharmaceuticals business will focus on emerging markets, where demographic changes and increasing access to healthcare are expected to drive sustainable growth,” he adds.
Adam Hill
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