Teva buys Cephalon, beefs up branded businessTeva is buying Cephalon for $6.8 billion, thwarting a hostile takeover attempt by Valeant and bolstering the Jerusalem-based generics giant's footing in the market for branded pharmaceuticals.
Teva's purchase of outstanding Cephalon shares creates a branded portfolio worth $7 billion in sales through 20 products and gives the company entrée into pain management and oncology while adding to its respiratory and CNS franchises. The combined company will boast a branded product pipeline of more than 30 late-stage compounds, including several innovative compounds with blockbuster potential (Revascor, Lupuzor, Cinquil and Nuvigil for bipolar depression) and three candidates that are ready to file (Cephalon's Omapro and Teva's NOMAC and BDP Nasal), said Cephalon CEO Kevin Buchi.
“Clearly this acquisition is a game changer for Teva,” said Teva chief Shlomo Yanai. “We will now not only be the world's largest generics company, but also one of the world's largest specialty pharma companies. By combining Cephalon's strong marketed portfolio and pipeline of branded products with Teva's we will diversify and expand our offering in a way that accelerates and secures the future of our branded business.”
Teva said it expects to realize annual cost synergies of “at least $500 million in year three” after the deal closes, as it is expected to in the third quarter, though the firm offered no details as to where cuts might fall.
The deal, the company said, will help it realize its goal of growing its branded revenues from $4.6 billion in 2010 to more than $9 billion in 2015.
In March, Teva inked a global partnership with Procter & Gamble for OTC drugs. The companies said combining P&G's marketing muscle and retail access with Teva's global reach and pharmacy prowess would enable them to quadruple the $1 billion annual sales of their combined OTC businesses.