Ahead of merg­er with Pfiz­er's gener­ic unit, My­lan makes $757M+ pur­chase for Eu­ro­pean throm­bo­sis port­fo­lio

My­lan is in­creas­ing its pres­ence in Eu­rope with a high-dol­lar ac­qui­si­tion of a blood clot port­fo­lio.

The gener­ic drug­mak­er is pay­ing more than three-quar­ters of a bil­lion dol­lars to gob­ble up As­pen Phar­ma­care’s throm­bo­sis busi­ness on the con­ti­nent. The ex­act sum of €641.9 mil­lion, or about $757 mil­lion, will be divvied up in­to an up­front pay­ment of about 41% of the to­tal, with the re­main­ing be­ing de­ferred to next June.

Ra­jiv Ma­lik

Tues­day’s deal, which is ex­pect­ed to close at the end of 2020, “will not on­ly make My­lan the sec­ond largest sup­pli­er of these prod­ucts to pa­tients in Eu­rope, ac­cord­ing to IQVIA, but al­so bol­ster our ex­ist­ing com­mer­cial in­fra­struc­ture to fur­ther ex­pand ac­cess to com­plex in­jecta­bles,” My­lan pres­i­dent Ra­jiv Ma­lik said in a state­ment.

As­pen, a phar­ma­ceu­ti­cal com­pa­ny based in South Africa, will re­tain the li­cens­ing rights to its throm­bo­sis drugs in emerg­ing mar­kets. The drug­mak­er saw shares go up 6% in off-hour trad­ing, while My­lan stock perked up a lit­tle over 2%.

With the ac­qui­si­tion, My­lan gains ac­cess to an­ti­co­ag­u­lants sold un­der the brand names Ar­ix­tra, Frax­i­parine, Mono-Em­bolex and Or­garan, which net­ted a com­bined sales to­tal of about $272 mil­lion in the 12-month pe­ri­od end­ing June 2020. As­pen will be man­u­fac­tur­ing and sup­ply­ing the prod­ucts, where­as My­lan will ac­quire com­mer­cial­iza­tion rights and re­lat­ed in­tel­lec­tu­al prop­er­ty of the busi­ness.

That in­cludes prod­uct reg­is­tra­tions and mar­ket­ing au­tho­riza­tions, in ad­di­tion to buy­ing out the Eu­ro­pean port­fo­lio.

There isn’t ex­pect­ed to be any over­lap with this trans­ac­tion and the merg­er of My­lan and Pfiz­er-spin­out Up­john, ini­ti­at­ed in Ju­ly 2019. That deal is al­so ex­pect­ed to close be­fore 2020 is out, My­lan said Tues­day, and will in­volve re­nam­ing the com­bined com­pa­ny to Vi­a­tris.

The merg­er orig­i­nal­ly came to­geth­er af­ter the US gener­ics mar­ket saw loss­es in re­cent years due to com­pe­ti­tion from man­u­fac­tur­ers in low­er- and mid­dle-in­come coun­tries like In­dia. Larg­er gener­ic drug­mak­ers had been con­sol­i­dat­ing, hop­ing the ex­tra cash could al­low fur­ther in­vest­ment and stave off the oth­er copy­cats. In 2018, In­dia’s Au­robindo Phar­ma bought parts of No­var­tis’ gener­ics unit for $1 bil­lion, and in 2015, Te­va swal­lowed Al­ler­gan’s gener­ic busi­ness for $40.5 bil­lion.

At the time, some an­a­lysts such as Cowen’s Ken Cac­cia­tore did not be­lieve the My­lan-Up­john deal would solve any­thing. Though he had “long felt that stand­alone My­lan was ab­solute­ly bro­ken,” the es­ti­mat­ed rev­enue from Vi­a­tris came in un­der his own pro­jec­tions.

“This on­ly adds con­vic­tion to our orig­i­nal the­sis that this merg­er will solve noth­ing, and that the pres­sure and neg­a­tive view of the com­bi­na­tion will like­ly on­ly in­crease in­to the even­tu­al close,” he wrote.

Up­john had been based in Shang­hai to pro­duce drugs for emerg­ing mar­kets, and once in­clud­ed knock­offs of block­buster prod­ucts such as Lip­i­tor, Vi­a­gra and Lyri­ca.

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