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Actavis acquires Forest for $25bn

Ramps up its shift into speciality pharmaceuticals

ActavisActavis has announced its largest acquisition to date, confirming a $25bn takeover of Forest Laboratories.

Once finalised the generic drug company will gain blockbuster franchises in CNS, gastroenterology, women's health, urology and cardiovascular, and combined annual revenues expected to top $15bn next year.

Paul Bisaro, chairman and CEO of Actavis, said: "With this strategic combination, we create an innovative new model in speciality pharmaceuticals leadership, with size and scale, a balanced offering of strong brands and generics, a focus on strategic, lower-risk drug development, and - most important - the ability to drive sustainable organic growth.

"Bolstered by one of the deepest and most diversified product portfolios in the industry with an exceptionally strong pipeline, this transaction creates a powerful engine for generating long-term, double-digit revenue and earnings growth."

Bisaro will lead the combined company, while Forest CEO and president Brent Saunders, along with two other members of the Forest board, will join Actavis' board of directors.

The deal continues Actavis' shift into speciality medicines, an area that will now be responsible for around 50 per cent of its revenues, complementing its generic drug operations, where it is ranked fourth in the market behind Teva, Sandoz and Mylan.

The combined company will have an annual R&D budget of more than $1bn and Actavis gains a number of new product candidates, with those nearing regulatory submission including treatments for Alzheimer's disease, cardiovascular disease and COPD.

The deal would also provide economies of scale in the region of $1bn and give Actavis the size needed to negotiate competitive positions for its medicines among US hospitals, insurers and doctors.

Expected to be completed midway through this year the Forest deal will be the Actavis' biggest-ever purchase, eclipsing last year's $8.5bn acquisition of Ireland's Warner-Chilcott as well as the $5.6bn reverse takeover by Watson in 2012.

See PMLiVE's Top Pharma List for Forest's CNS and cardiovascular sales rank and an infographic of Forest's sales performance

Article by
Dominic Tyer

19th February 2014

From: Research, Sales, Marketing

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