Allergan PLC, amid reports that it is looking to separate its hefty generic drug business in a different $45 billion deal, said Sunday that it has agreed to buy for $560 million cash upfront a privately held developer of treatments for depression.
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“Through our acquisition of Allergan Generics, we shall set up a robust groundwork for long term, lasting development, moored by primary generics features along with a world class late stage pipeline that may quicken our capability to create a great collection of goods – each in generics and specialty as well as the intersection of both”, Erez Vigodman, leader and President of Teva, said in a statement.
The Teva-Allergan deal is the latest in a series of eye-popping mergers in the global pharma business.
Word of the acquisition saw Teva shares shoot up 13 percent in pre-opening trading on the Nasdaq. Exchanging in Teva stocks on the Tel Aviv Stock Market stopped on the sale’s media.
For Allergan, the deal will allow the company to sharpen its focus on its branded pharmaceutical business and strengthen its financial position.
Generic drugs are less expensive than name-brand drugs, but the prices of some generics have soared due to a lack of competition or shortages brought on by manufacturing problems. U.S. hospital systems are buying doctor practices and consolidating. Aetna Inc., the nation’s third-largest insurer, also plans a $35 billion bid for Humana Inc.
Allergan now has a market capitalization of $121 billion.
According to Allergan, both therapies have been well-tolerated in studies to date, with no serious drug-related adverse events or any of the side effects typically seen with NMDA antagonists. Acquisitions were integrated by the intense development of Teva around the world and patent challenges.
Teva Pharmaceutical Industries, the world’s largest generic drugmaker, reported second-quarter profit on Monday that beat estimates and raised its full year 2015 outlook.
The company into building branded medication also branched away, including Copaxone, designed in Israel for your cure of multiple sclerosis.
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Midsize companies such as Teva have largely driven the breakneck pace of consolidation in the drug industry in recent years-part of a broader boom in mergers and acquisitions-as they take advantage of cheap debt and in some cases, low tax rates secured by relocating overseas, while drawing on the approval of investors who have driven their shares higher. It also has a patent on Azilect, a treatment for Parkinson’s disease. “In Israel … since it’s a very small community, everybody inspires everybody else”, Vardi said.
