Months removed from closing its $7 billion deal to buy Meda, Mylan is shuttering the U.S. headquarters of its new subsidiary in a move that’ll leave 94 employees without jobs.
Effective Dec. 31, Meda Pharmaceuticals’ office in Somerset, NJ, will be shut down, Mylan said in a statement. It’s a result of “ongoing integration efforts” and will mean 94 employees need to find new work, according to a WARN notice filed in New Jersey. Meda’s home base is near Stockholm, Sweden.
The HQ shutdown follows the August closing of Mylan’s Meda purchase, which came with pharma products, OTC drugs and generics. In announcing the deal in February, Mylan said Meda’s presence in China, Southeast Asia, Russia, the Middle East and Mexico would complement its operations in other emerging markets.
Things have changed dramatically for Mylan since it announced and closed the deal, as industry watchers know. Soon after Mylan brought Meda into the fold, controversy erupted about repeated price hikes for the company’s big-selling EpiPen. The company is under investigation by Congress and U.S. agencies, and it already ponied up $465 million to settle claims it overcharged Medicaid for the lifesaving epinephrine injector–admitting no fault–in an arrangement that one senator has called “unacceptable.”
EpiPen is expected to bring in much lower sales for Mylan in the coming years, partly because of an authorized generic Mylan is launching as a defense against its branded pricing criticism. That makes adding Meda even more important, because Mylan will need other products to pick up the slack.
Mylan is “working closely” with affected Meda employees to provide “severance, benefits and outplacement services during this transition,” according to a statement.
The company’s deal for Meda followed an intense, but ultimately fruitless, effort to snag generic rival Perrigo for $26 billion. Some market watchers said Mylan had overpaid for Meda, but Chairman Robert Coury said at the time the buy wouldn’t take his company out of the running for other M&A action.
Following the Meda deal announcement, Mylan shares fell about 17%. They had recovered some by the summer months, but the EpiPen scandal has taken a big toll, dragging shares down by about 25% since August.
By Eric Sagonowsky
Source: Fierce Pharma
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