Teva buys Allergan Generics in $40bn deal
Pharmaceutical company Teva has bought Allergan Genericsfrom drugs business Allerganin a $40.5 billion deal.
The agreement, announced today, July 27, means Teva will pay $33.75 billion to Allergan and hand $6.75 billion worth of Teva’s shares to the Ireland-based company.
As part of the deal, Allergan will retain 50% of Teva’s future sales from Allergan’s generic Revlimid (lenalidomide) drug, while Teva will take control of Allergan’s commercial units, third-party supplier Medis and its worldwide research and development operations.
Teva said the deal will help it to “focus on complex generics, biosimilars and specialty products in our key therapeutic areas” and “eliminate inefficiencies and duplications in the global generics space”.
According to Allergan, known as Actavis until last month, the company is estimated to make $15.5 billion in sales this year in total and employs more than 30,000 people globally.
Currently, Allergan has more than 220 Abbreviated New Drug Applications pending with the US Food and Drug Administration.
The deal means that Teva is now one of the ten biggest pharma companies in the world.
Erez Vigodman, chief executive of Teva, said: “This transaction delivers on Teva’s strategic objectives in both generics and speciality. Through our acquisition of Allergan, we will establish a strong foundation for long-term, sustainable growth, anchored by leading generics capabilities and a world-class late-stage pipeline that will accelerate our ability to build an exceptional portfolio of products—both in generics and speciality as well as the intersection of the two.”
Brent Saunders, chief executive of Allergan, added: “This transaction will accelerate Allergan’s evolution into a branded growth pharma leader, enable a sharpened focus on expanding and enhancing our global branded pharmaceutical business and strengthen our financial position to build on our proven track-record of value creation led by effective capital deployment.”
Saunders said that while the company was not looking for a deal, Teva’s offer was “very compelling”.
David Gass, partner at law firm Marshall IP, said: "This acquisition announcement follows a trend of mergers and consolidations in the pharma industry in the last couple of years."
