Sector News

Ready for a Teva-Mylan scrap? It’s here. Teva finally launches its $40B takeover bid

April 22, 2015
Life sciences
The rumors are true: Teva does indeed have eyes for Mylan. And after months of speculation, its bid is here.
 
The Israeli company Tuesday proposed an $82-per-share buyout, split 50/50 between cash and stock–an offer CEO Erez Vigodman called “compelling” for both Teva and Mylan stockholders.
 
A combined company would create a generics superpower, Teva figures, with a pipeline of more than 400 pending generic drug applications at the FDA. That includes more than 80 first-to-files, which can give one drugmaker a lock on generic sales for 6 months after a patent expiration.
 
Together, Teva and Mylan would also boast advanced manufacturing technologies that deliver hard-to-produce drug formulas, not to mention the globe’s leading API division, the Israeli company says.
 
And don’t forget specialty drugs: Between them, the two drugmakers could show off a $10 billion business in that department, with leading positions in multiple sclerosis, respiratory, pain, allergy meds and other areas.
 
All told, Teva believes it would be looking at mid-single-digit top-line growth, more than $30 billion in revenue, and EBITDA exceeding $10 billion come 2016–assuming Mylan agrees to tango. On top of that, Teva says it can squeeze out $2 billion in savings on annual costs and taxes, most of it within three years.
 
Those savings would be possible partly because the companies’ businesses overlap significantly. A boon for cutting costs, but as some analysts–and Mylan Chairman Robert Coury–have pointed out, that overlap might thwart regulatory clearance for a deal.
 
Not so, Teva says: It “carefully studied” the regulatory aspects of a tie-up, and it’s confident it can structure a transaction to meet regulators’ approval.
 
For Teva, it’s the big jump into M&A action that industry watchers have been waiting for ever since Vigodman took the helm early last year. With generic challengers champing at the bit to get a shot at lead product Copaxone, Teva is in need of some top-line assistance. And it has promised a renewed focus on the generics business that was once its bread and butter.
 
But Mylan will be a tough sell. The company recently set in motion a poison pill plan–designed to block unwanted takeovers–and Friday, Coury unequivocally opposed a Teva merger. In a statement, Coury said a match between Teva and Mylan “is without sound industrial logic or cultural fit.” Mylan is committed to a standalone path, he said–which includes pursuing its $29 billion bid for Ireland’s Perrigo.
 
Vigodman doesn’t see it that way. “[A] combination of Teva and Mylan is a much more attractive and value-creating alternative for Mylan and its stockholders than Mylan’s proposed acquisition of Perrigo,” he wrote in a Tuesday letter to Coury.
 
As for the cultural differences Coury mentioned? Not a problem, from where Vigodman’s standing.
 
“Both Teva and Mylan have achieved their respective goals through innovation, vision and a commitment to quality,” the CEO said in a Tuesday statement. “Mylan’s business is a natural fit with our own and is highly complementary to it–and bringing together our two companies would not only deliver the greatest value for our financial stakeholders, but also enable us to better serve patients, customers and healthcare systems throughout the world.”
 
By Carly Helfand
 

comments closed

Related News

July 3, 2022

Novo Nordisk joins with nursing group to highlight correlation between Type 2 diabetes and cardio risk

Life sciences

Despite atherosclerotic cardiovascular disease (ASCVD) being the leading cause of death for people with Type 2 diabetes, half of those people have no idea of this risk. Novo Nordisk has teamed up with the Preventive Cardiovascular Nurses Association (PCNA) for “Making the Connection,” a program to help increase understanding of the link between the two diseases.

July 3, 2022

First treatment for ‘broken heart syndrome’ trialled

Life sciences

The first ever treatment for broken heart syndrome – also known as Takotsubo cardiomyopathy – is to be trialled by researchers at the University of Aberdeen. Scientists will trial a programme of exercise conditioning and psychological therapy for people who have been diagnosed with the condition following a £300,000 grant from the British Heart Foundation.

July 3, 2022

Nestlé acquiring The Better Health Company in market expansion deal

Life sciences

Nestlé Health Science is set to acquire The Better Health Company (TBHC), as part of its goals to grow global market share while spurring innovation across the nutrition industry. The acquisition includes the GO Healthy brand with its vitamins and supplements, Egmont, the Manuka honey brand and New Zealand Health Manufacturing, an Auckland-based manufacturing facility for vitamins minerals and supplements.