TEVA/MYLAN – Comments by Panmure’s Dr Lucinda Crabtree

Teva (TEVA US, n/c) – so after all that Teva has made a $40bn offer for Mylan (MYL US, n/c) …this comes after much speculation in the media…and what an opportune time given recent news flow that Novartis/ Momenta’s (n/c) Glatopa was approved (first substitutable generic for copaxone, which is a multiple sclerosis drug, >$3bn sales in US last year, c. $72k list price per pt annually – see wall street journal article below ).


Mylan had made a big issue of stating all the reasons why such a combination would not be viable as well (in a statement issued Friday)….. it said that it was fully committed to its stand-alone strategy, including its proposal to acquire Perrigo (PRGO US, n/c), and this speculation has no impact whatsoever on this strategy.  Mylan noted that it has studied the potential combination of the two businesses for some time and believes it is clear that such a combination is without sound industrial logic or cultural fit. Further, there would be significant overlap in the companies’ businesses and Mylan believed it unlikely that any such combination could obtain anti-trust regulatory clearances.


Now it seems Mylans $28.9bn offer for Perrigo has been rejected (Teva did state that  it believes its offer is a more attractive alternative for Mylan shareholders than Mylans proposed acquisition of Perrigo) ….the rejection is because it is believed by the board that it substantially undervalues Perrigo (for example, they state that does not take into account the full benefits of the Omega Pharma acquisition) and is not in the best interests of shareholders….it is argued that Perrigo has a proven track record of value creation, generating returns of >970% since fiscal 2007 and it’s organic net sales 3  year CAGR goal for 2014 – 2017 is 5-10%….


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