NEW YORK: Suitors in the generic drug industry’s big consolidation push signaled Wednesday they would keep fighting for deals, even after Perrigo rejected a sweetened offer from Mylan.
It was the second time in less than a week that Mylan raised its bid, this time to $35.6 billion, to merge the two into a company with $15 billion in annual sales.
And it was the second time Perrigo responded within hours with a flat “no,” saying the offer deeply undervalued the company.
Even as that happened, Israel’s generics giant Teva restated its interest in buying Mylan despite a blistering rejection from Mylan earlier this week.
Whether either of the unsolicited campaigns will result in a deal soon is anybody’s guess.
But analysts say both Mylan and Perrigo are ripe for takeovers in the next five years due to pressures in the global pharmaceutical industry even if they survive the current onslaught.
“The ‘who’ and ‘when’ are extremely unclear,” said Michael Water house, an equity analyst at Morning star. “I would say that eventually, a lot of these companies get bought.”
Generic drug companies are under pressure to do deals now because there are fewer big-money drugs shifting to generic status compared with a few years ago, when cholesterol medication Lipitor and other blockbusters were available, Water house said.
Water house said the sector also views cost-cutting as a key tool for raising profits as the industry faces rising competition from suppliers in India, a trend which exerts downward pressure on drug prices.