Teva to regain generics lead with Ivax purchase
domination in the generic pharmaceuticals sector yesterday with a
$7.4 billion cash and stock bid for US company Ivax, reports
Phil Taylor.
The deal will give Teva leadership of the US market, with more than 300 product lines, as well as an increased presence in the growing Central and Eastern Europe and Latin American markets, said the company's CEP Israel Makov in a conference call.
It also adds a respiratory product line to Teva's portfolio and a series of high-value generic lines, including versions of Pfizer's blockbuster antidepressant Zoloft (sertraline), GlaxoSmithKline's Zofran (ondansetron) for nausea and Merck & Co's prostate drug Proscar (finasteride). And Makov said the combined generics pipeline in the US will be three times larger than its nearest rival.
Along with arch rival Sandoz, part of Swiss pharmaceutical group Novartis, Teva has been buying up smaller generic houses to build a strong position in the generics market, which has been growing quickly over the last few years as a raft of former blockbuster drugs lost patent protection and cash-strapped health systems have tried to limit their spending on prescription drugs.
Murray Aitken, IMS Health's senior vice president for corporate strategy, said recently that the $500 billion world market for prescription drugs is increasingly being affected by efforts to cut healthcare costs by payers, particularly the greater use of generic drugs which now account for 30 per cent of volume consumption in the US, Canada, Germany and the UK.
Bigger is better in generics, because payers are increasingly trying to do deals with single providers of pharmaceuticals to cut costs and companies which can offer a broad range of products have a competitive advantage.
Sandoz recently wrested Teva's crown as the largest generics company in the world after it bought Hexal and Eon Laboratories, having also snapped up three firms - Croatia's Lek, Canadian company Sabex and Durascan of Denmark - in the preceding months. But adding Ivax' $1.8 billion in sales will boost Teva's annual revenues to $7.1 billion, well ahead of Sandoz' tally of $5 billion.
The Ivax purchase would be the largest by an Israeli company, surpassing Teva's $3.1 billion acquisition of Sicor in January 2004.
