We posted about American generic manufacturer IVAX being taken over by Teva, Israel's biggest in April 2006. This made Teva the worlds biggest generic company with combined sales to the US market of 330 drugs and sales of US$7 Bn - of which US$1.2 Mn is MS treatment Copaxone - (Glatiramer Acetate ) The first innovative drug to be developed in Israel (at the Weizmann Institute of Science ) and to receive FDA approval, . The US HQ is in Kansas City.
Teva is now to acquire Barr of the US in a $7.5bn deal that will sharply reinforce its position as the largest seller of off-patent medicines. Teva closed at at $45.80 - a dividend yield of 1%.
The agreed takeover, at an agreed 32% premium to the US company's average share price over the past year, will create a group with US$12bn in annual sales, 500 marketed products and more than 200 applications for new drugs filed with US regulators alone. The combined company would be a generic powerhouse employing about 37,000 people globally and operating directly in more than 60 countries.
Teva had a knock-back when clinical trials failed to show a significant benefit for a new dosage of Copaxone, that accounts for one-third of profits and which will be subject to growing competitive pressure in the next few years.
This follow other generic deals recently, with Daiichi-Sankyo of Japan offering up to US $4.6bn for Ranbaxy of India. Fresenius of Germany bidding US$3.7bn for APP of the US - see post Wednesday, July 09, 2008 Heparin -another chapter in the tale APP taken over by Fresenius - Patrick Soon Shong trousers US$3 Billion .
Sanofi-Aventis of France is also tendering US $1.9bn for Czech-based Zentiva although they have rejected the bid as far too low - Bid Fails to Reflect the Company’s Underlying Value and Future Prospects . They have a major position in Czech, Turkish, Romanian and Slovak markets .
Shlomo Yanai, CEO at Teva for less than 18 months ago,sees this as another step in a 5 year plan for Teva double sales by 2012 with a net margin of at least 20 %. Buying Barr would also boost Teva's generic franchise in Central and Eastern Europe as well as Italy and Spain. Barr jumped into the international market when it acquired Croatia's Pliva based in Zagreb in 2006.
For each Barr share, investors will receive US$39.90 in cash and 0.6272 Teva American Depositary Receipts, and Teva will assume $1.5bn of net debt. If the Barr board reject the deal Lehman Bros have negotiated a US$200 Mn break fee .
Teva Q1 Profits shine
On July 29th Teva revaled Q1 figures - Revenue of US$2.823 billion, up 18%, and EPS of 65 cents was ahead of expectations. Teva, saw Europe, 30% of sales, rise 25%, while sales Latin America and other parts of the developing world, were up 37%. Sales in the US rose 12%.
The company attributed a large part of the sales growth to generics in Europe.
The company say the R&D budget from 5.7% to 7% of sales, for improved development of generic drugs. Full year forecast EPS are $2.69 to $2.75.