Teva Pharmaceutical Industries has elaborated on its recent purchase of Barr Pharmaceuticals. The deal, valued at US$7.5 billion, raises interesting questions about Teva’s new scope. The two firms held an acquisition luncheon a few days after the announcement, in which they emphasised the strong strategic fit between the two companies, its expanded product portfolio and pipeline and its increased presence in first-to-file/paragraph IV applications.
Most significantly, Teva discussed its strengthened presence in key global markets; post-takeover, Teva will be able to offer direct sales in more than 60 countries. Eastern and Central Europe were highlighted as areas of strength for the combined firm. Barr and Teva combined would have been ranked fifth in Germany, third in Poland, ninth in Russia and first in Croatia in 2007. The new presence in Europe will be complemented by Teva’s new Spanish capabilities, following the successful completion of Teva’s Bentley Pharmaceutical purchase.
As for future growth opportunities, Teva CEO Shlomo Yanai noted in an interview with the Financial Times that he is now keen to forge a joint venture in Japan to capitalise on the country’s fast-growing generics market. "Right now Japan is more ripe for generics, (but still) difficult to break into," Yanai commented. Japan has traditionally been reluctant to accept generic medicines; the government has been keen to change habits, however, in an attempt to reduce medical costs. Recent rule changes compel generic substitution unless a doctor specifically requests a patented drug on the prescription form.
Any attempt by Yanai and Teva to get into the Japanese generics market is likely to come after Ranbaxy’s entrance via Daiichi Sankyo, which is in the process of buying the Indian firm. The deal between the two is still on track, in spite of recent allegations from the US Department of Justice against Ranbaxy. The DOJ claims that the company submitted false information about stability and bioequivalence to support ANDAs for antiretrovirals distributed by the President’s Emergency Plan for AIDS Relief (PEPFAR) programme. Prominent Congressmen in the US House Committee on Energy and Commerce have now indicated that it will soon commence a formal investigation into the Ranbaxy drug approvals and potential violations of GMP regulations. The moves have seemingly not deterred Daiichi however, which has been keen to stress that its share purchase agreement with Ranbaxy is binding and final.
Jonathan Way - Editor, World Generic Markets
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