UPDATE: Teva Buys Japanese Generics Maker Taiyo
May 16 2011 - 4:29AM
Dow Jones News
Teva Pharmaceutical Industries Ltd. (TEVA) Monday said it had
acquired a 57% stake in Japan's third-largest generic drugs maker
for $460 million in cash, significantly boosting its presence in
the country.
The deal, which gives privately held Taiyo Pharmaceutical
Industry Co. Ltd. an enterprise value of $1.3 billion, includes an
offer to buy all the remaining shares in the company.
Teva, the world's largest producer of generic drugs, said it
expects the acquisition to add to earnings within four quarters of
the deal closing, which it expects by the end of the third quarter.
It will pay for it with a mixture of cash and bank debt.
Taiyo posted sales of $530 million in 2010. It has a portfolio
of over 550 generic drugs in various therapeutic areas.
"This acquisition will enable Teva to deliver on our strategic
objective of becoming a leading player in the fast-growing Japanese
generics market. In fact, we now expect to reach our 2015 target of
$1 billion in sales in Japan ahead of schedule," Teva Chief
Executive Shlomo Yanai said in a statement.
"Japan is the second-largest pharmaceutical market in the world,
valued at $96 billion in 2010 with a relatively low rate of generic
penetration of 23%. The Japanese government has expressed its
intention to increase generic penetration to 30% by 2012," the
company added.
The Israeli company has been expanding aggressively
recently.
Earlier in May, it announced a deal to acquire U.S. specialty
drug maker Cephalon Inc (CEPH) for $6.8 billion, to boost its
presence in branded drugs. In March, Teva unveiled a joint venture
with Procter & Gamble Co. (PG) that combines their
over-the-counter drug businesses outside North America, projecting
sales of up to $4 billion by the mid to later part of the decade.
Last summer it bought German drug maker Ratiopharm for $5
billion.
The U.S. remains Teva's main market, accounting for half of its
revenue, but the company wants to expand its exposure in markets
with higher growth potential, and Monday's announcement reflects
that aim.
Teva last week said first-quarter profits rose 7%, as strength
in Europe and emerging markets help offset weakness in North
America where generic drug sales were hit by a lack of new launches
and manufacturing issues.
The company wants to reduce its reliance on Copaxone, its
leading branded treatment for multiple sclerosis, which faces
increasing competitive threats.
Last month, the company reported positive data on its oral
multiple sclerosis treatment laquinimod, developed by Sweden-based
Active Biotech (ACTI.SK), which may provide a foothold in the
emerging market for oral MS treatments while also helping dilute
the dependence on Copaxone's profits.
-By Sten Stovall, Dow Jones Newswires; 44-20-7842-9292;
sten.stovall@dowjones.com
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