Teva in talks to buy Allergan big generic-drug unit

Should the deal with Dublin-based Allergan now go through, there will be two big upsides for Teva, he said. Announced pharmaceutical deals so far this year have topped $180 billion, according to data compiled by Bloomberg. A Teva spokesman declined to comment on possible talks with Allergan.

Large drug makers are trying to realign their operations to focus on a small number of leading businesses, while smaller specialty and generic producers are seeking larger scale. In June 2014, just a few months after joining the company himself, Vigodman hired the former head of Actavis’ generic drug business, Sigurdur Olafsson, to fill a similar role at Teva.

Teva’s market position will be bolstered once it acquires the generic drug unit of Allergan.

With profit margins on branded products as much as 80 percent, compared with about 50 percent for generics, Allergan chief executive Brent Saunders may favor focusing growth on premium drugs. It would also offer opportunities for significant cost synergies and tax savings. Though the Teva-Mylan feud has hogged the industry spotlight since April, Allergan’ generics business may actually have been Teva’s first choice. Were Teva to clinch a deal with Allergan for its generic drug business and drop its bid for Mylan, this would likely strengthen the hand of Mylan’s management in its campaign to buy Perrigo. The purchase of Allergan’s generic business would nearly certainly mean the end of Teva’s interest in Mylan, which last week invoked a “poison pill” to avert the takeover, when the Dutch fund Stichting exercised its call option to temporarily takeover Mylan and protect it from being bought.

Allergan’s market value Friday stood at $124 billion.

Teva will pay over $45 billion for the botox maker unit, report the “Wall Street Journal”.