Teva Acquires Taiyo - Analyst Blog
July 14 2011 - 1:08PM
Zacks
Teva Pharmaceutical Industries Ltd. (TEVA)
recently acquired Japanese company Taiyo Pharmaceutical Industry
Co. Ltd. for $934 million in cash.
The company used available funds and bank debt to finance the
deal.
Deal to Strengthen Teva’s Presence in Japan
The deal is in-line with Teva’s strategy of becoming a major
player in the Japanese generics market. Taiyo, which posted sales
of $530 million in 2010, is the third largest generic pharma
company in Japan. Taiyo’s portfolio consists of more than 550
generic drugs.
With this deal, Teva expects to deliver sales of $1 billion in
Japan ahead of its 2015 target. The Japanese market, which is the
second largest pharma market in the world with sales of $96 billion
in 2010, has a relatively low rate of generic penetration. With the
Japanese government working on increasing generic penetration from
23% to 30% by 2012, the market represents huge commercial potential
for generic players like Teva.
Teva has been pretty active on the deal-making front over the
past few quarters. So far in 2011, the company has struck several
deals, including the upcoming acquisition of biopharma company,
Cephalon, Inc. (CEPH). The Cephalon deal will not
only strengthen Teva’s pipeline, it should also help the company
achieve its goal of increasing its branded revenues from $4.6
billion in 2010 to more than $9 billion in 2015.
Once the acquisition goes through, the combined company’s
branded product portfolio will consist of more than 20 products
representing sales of about $7 billion. Cephalon also has a
presence in the generics market following its April 2010
acquisition of Mepha AG, which specializes in the marketing of
branded and non-branded generics and specialty products in more
than 50 countries.
We currently have a Neutral recommendation on Teva, which
carries a Zacks #3 Rank (short-term “Hold” rating).
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