Watson to acquire Arrow for $1.75bn
Arrow owns 36 per cent of Eden Biodesign, a company specialising in development and manufacturing services, and Watson believes it can leverage this knowledge and manufacturing capability to achieve its biogeneric goals.
The skills and capacity required to produce biologics create higher barriers to entry for biogenerics than small molecules, which has led to companies inking deals, such as Teva’s venture with Lonza, to gain the expertise.
In addition the acquisition should help Watson expand into new markets, a point that Paul Bisaro, president and CEO of Watson, expanded on.
Bisaro said: “The combined company will have a global infrastructure and a strong product portfolio and pipeline which create significant opportunities for long term growth.
“Additionally, Arrow's manufacturing network, including facilities in Canada, Malta and Brazil, will further expand Watson's global supply chain."
Watson believes there is little overlap between the companies, easing the process of integration. Arrow’s global sales, regulatory and legal infrastructure are highlighted by Watson as being complementary to its clinical and regulatory capabilities.
Lipitor lights the way
A highlight of Arrow’s pipeline is the exclusive US rights to launch the authorised generic version of Pfizer’s blockbuster Lipitor (atorvastatin) in November 2011.
The revenues generated by this will be supported by other generic product launches that the company anticipates making in the next three years and the 40 new molecules it believes will gain approval in this time.
New molecules will be created by Arrow’s in-house R&D team, which employs 250 people and has developed 50 molecules since 2000.
Watson regards Arrow as one of the fastest growing generic pharma companies in the world, citing 67 per cent organic growth rate since 2001 that led to the company posting revenues of $647m in 2008.
The combined business will have revenues of $3bn. Watson anticipates that the deal will close in the second half of 2009.
