Well our prediction that Teva would make a deal to buy Allergan’s generic business “in the coming week” was off the mark. It happened in the coming hours! But the other prediction that Teva would drop its bid for Mylan did indeed come true. As a result of Teva dropping its bid, Mylan stock was mauled by the market which had marked it up 30% in anticipation of a Teva deal. It is up to Mylan now to justify its assertion that Teva was a bad deal for shareholders. No doubt the stress level at Perrigo rose substantially yesterday as it had hoped a Teva/Mylan deal would save it from an unwanted and unwelcome Mylan takeover.
Within 24 hours of the Teva/Allergan announcement Reuters reports that Hikma, the Jordanian pharmaceutical company, will buy Boehringer's US generic interests (mainly Roxane) for about US$2.65 billion in cash and stock. Hikma has been gradually increasing US generic market share for several years after entering the US market with its line of injectable antibiotics (especially cephalosporins). Hikma claim this deal will make them the 6th largest US generic company by market share.
So the “consolidation summer” continues with another multi-billion dollar deal. These deals are reshaping the top end of the US generic business. IMS has not published updates to the list of “top companies by prescriptions” since 2012 so it is well and truly out of date. However we can guess at what the top 6 might look like.
1. Teva
2. Mylan
3. Sandoz
4. Pfizer (Greenstone & Hospira)
5. Endo
6. Hikma (with Boehringer)
In this list Teva (with Allergan's generic business) might be nearly three times bigger than Mylan which would be a huge gap between the 1st and 2nd company.
It has been rumored for many months that Pfizer is considering the future of its generic business. Were Pfizer to put that business up for sale any of Mylan, Sandoz, or Endo might be likely buyers in an effort to keep pace with Teva.
