Much ado about something

THE plot is worthy of a Shakespearean comedy. Teva is in pursuit of Mylan. But Mylan dislikes its suitor and runs away to declare its love for Perrigo, while seeking a poison pill in case it is forced to marry Teva. Perrigo, though, rebuffs Mylan. With many suitors, Perrigo is holding out for a better offer—perhaps even from Teva itself. It may not be quite midsummer but the unfolding drama featuring three generic-drug makers could well run until then.

This week Mylan, based in the Netherlands, rejected a $40 billion bid from Teva, of Israel, arguing that it “lacks industrial logic”. To be on the safe side it has enacted a poison-pill defence against hostile takeover. Combining the world’s largest generic-drug maker, Teva, with the third-largest, Mylan, would create a company with around $30 billion in annual revenues and, Teva says, $2 billion in cost savings. As part of its plan to escape Teva’s clutches, Mylan has made three successive takeover offers to Perrigo, a smaller Irish rival, only to be spurned each time. Perrigo now seems likely to attract interest from other companies.

For Teva the merger would, besides bringing many economies of scale, allow it to put more effort into copying hard-to-make “biologics”—an increasingly important class of drugs that are manufactured inside animal cells or micro-organisms such as bacteria. It would also...

via Business Feeds

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