Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) is ready for another major acquisition, CEO Shlomo Yanai said in an interview with Bloomberg published today. Teva bought Barr Laboratories Inc. for $7.4 billion last year. Yanai said that the company may look beyond generic drugs for the next acquisition. “If we find a target that is in line with our strategy in the specialty area, in the biotechnology area, we definitely are going to consider it,” Yanai said. Bloomberg says that Yanai would not mention specific takeover targets, but comments that Teva is seeking to diversify in patented medicines as well as increase its market share in generic drugs, and cites Cowen & Co. analyst Ken Cacciatore as saying that King Pharmaceuticals Inc., Endo Pharmaceuticals Holdings Inc., Shire Plc, Acorda Therapeutics Inc. and BioMarin Pharmaceuticals Inc. were possible targets.
Last month, Yanai said that Teva would probably spend “the next year or two” digesting the Barr purchase.
Investors would welcome a move to plug the gap that will arise when Teva’s multiple sclerosis medicine Copaxone, which accounts for as much as 35% of its earnings, faces competition, Cacciatore wrote in a report to investors yesterday.
Teva completed the purchase of Barr, at the time the world's fourth largest generic drugs company, in December 2008. Yanai told "Globes" then, "Teva is constantly examining opportunities, and the current reality is bringing opportunities to the surface at a higher rate than usual. If we find a good opportunity, we won't let it go." Before the Barr acquisition, Teva bought CoGenesys for $400 million and Bentley Pharmaceuticals for $360 million.
Last year, Teva announced a five-year plan with a goal of $20 billion sales and $4 billion profit annually by the end of 2012.
Meanwhile, Teva CFO Eyal Desheh warned that if the shekel continued to strengthen against the US dollar, Teva would not be able to absorb the rise in its expenses, and would consider shifting production from Israel. Teva is the world's largest generic drugs company, and has three main plants in Israel, in Jerusalem, Kfar Sava, and Petah Tikva.
About 20% of Teva's employees are in Israel, while its revenue is mostly in dollars, so that a stronger shekel against the dollar magnifies expenses and erodes profitability.
Published by Globes [online], Israel business news - www.globes.co.il - on June 18, 2009
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