"Korea JoonAng Daily" reports that Teva held initial talks with Handok Pharmaceuticals.
Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) is interested in acquiring a Korean pharmaceutical company, and Handok Pharmaceuticals Co. Ltd. (KSX: 2390) is a possible target, according to the "Korea JoonAng Daily" in a report on the local pharmaceutical industry.
Handok Pharmaceuticals has a market cap of 184 billion won ($170 million). Assuming that Teva wants to acquire the company, and even if it pays a substantial premium for it, the acquisition willd not be a big deal, given Teva's $2 billion in cash reserves.
Handok said, "We are continuing preliminary talks with an Israeli company."
Teva president and CEO Jeremy Levin has said several times that the company would make no big acquisitions in the near future. Teva said in response today, "We have nothing to add to what was stated by Handok. If we have something to report, we'll report it."
Handok, founded in 1954, is run by chairman and CEO Young-Jin Kim, who is also the controlling shareholder. It develops and sells brand and over-the-counter drugs. The company jointly develops with other companies in the research and development of oncology, cardiovascular, and central nervous system disease treatments. Kim owns 46.8% of the company and Korean firm IMM Private Equity owns 30%. In September, Kim and IMM bought out Sanofi-Aventis SA's (NYSE: SNY; Euronext: SAN) stake in Handok.
10% of South Korea's population of 49 million is over the age of 65. Although the elderly consume more medications, local drug companies are coping with a government decision from a few months ago to cut drug prices, which is hitting the companies' profits. Teva is apparently undeterred by this.
Published by Globes [online], Israel business news - www.globes-online.com - on November 15, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012
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