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The chief executive of generic drug maker Actavis says he will stay with the Swiss company until its integration by U.S. peer Watson Pharmaceuticals Inc. (WPI) is completed early next year.
"I will stay on board and help the integration until early next year, but my mission ends thereafter," Claudio Albrecht told Dow Jones Newswires in an interview Thursday.
Albrecht, who formerly headed the German generic drug maker Ratiopharm, said he will probably remain active in the sector after that, but declined to comment on specific plans.
Watson on Thursday formally said will acquire Actavis in a deal potentially valued at roughly EUR4.5 billion ($5.94 billion), which will give the U.S.-based group a boost in the global rankings of generic drug makers to No. 3. The deal is expected to close in the fourth quarter.
Albrecht called the transaction a "win-win deal" as it more than doubles Watson's international access and strengthens its position in key established European markets as well as emerging growth markets, including Central and Eastern Europe and Russia.
Albrecht joined Actavis as CEO in late 2009, turning the company around and growing sales by around 15% annually in the last two years, outperforming other players in the sector. "Watson saw our performance and thus approached us," Albrecht said.
He said Actavis remains on track to grow sales and Ebitda by a further 15%.
Albrecht said the turnaround at Actavis was achieved by centralizing the company, bringing in managers from outside the group and building research and development teams that shepherd copycat drugs from early research and development stages to launch.
He foresees the current spate of M&A activity continuing.
Albrecht expects the four largest players to either take over smaller rivals or the Tier 2 companies to merge among each other, potentially with the help of financial investors. As a role model, he pointed to Czech based Zentiva, which was taken private by equity firm Warburg Pincus (WBP.XX) in 2003 and subsequently snapped up Eastern European competitors before it was taken over by French drug heavyweight Sanofi S.A.(SAN.FR).
The 'big four' generic drug makers are Teva Pharmaceuticals (TEVA), Swiss drug heavyweight Novartis AG's (NVS, NOVN.VX) Sandoz unit as well as the combination of Watson and Actavis, which will surpass the world's currently third-largest competitor Mylan Inc. (MYL).
"Actavis will launch 20 generic drugs this year, with a copycat of Pfizers Lipitor being one of the largest ones," he said.
By Eyk Henning, Dow Jones Newswires, +49(0)69 29725 108; firstname.lastname@example.org