ACQUISITION
Merck Sells Generics Business to Mylan Labs
Darmstadt, Germany (May 13)—Mylan Laboratories Inc. (Canonsburg, PA) and Merck KGaA (Darmstadt, Germany) have signed a share purchase agreement under
which Mylan will acquire all of Merck's worldwide operations within Merck Generics. The $6.7-billion, all-cash transaction
is expected to close later this year, subject to regulatory review. Merck Generics boasts a product portfolio comprising 400
substances, dosage forms, and drug-delivery systems.
In a prepared statement, Karl Ludwig-Kley, chairman of the executive board at Merck KGaA, said the company will now focus
its resources on growing its pharmaceuticals and chemicals business sectors. In 2006, Merck's generics division accounted
for 29% of Merck Group sales and 28% of the group's operating result, with sales rising 6.9% in 2006. Merck Generics employs
nearly 5000 people worldwide.
Mylan operates through Mylan Pharmaceuticals (generic pharmaceuticals), Mylan Technologies (transdermal patches, generic and
brand-name), and UDL Laboratories (supplier of unit dose pharmaceuticals). Mylan also owns a controlling interest in Matrix
Laboratories, which produces active pharmaceutical ingredients.
Mylan has stated that it "does not anticipate significant reductions in headcount at Mylan, Matrix, or Merck Generics" as
a result of the transaction.
-Maribel Rios
ACQUISITION
Sun Pharmaceutical Agrees to Acquire Taro
Mumbai, India (May 21)—Sun Pharmaceutical Industries and its subsidiaries signed definitive agreements to acquire Taro Pharmaceutical Industries
(Haifa Bay, Israel), a generics manufacturer with subsidiaries and manufacturing operations in the United States, Canada,
and Israel.
Sun will fund the $454-million acquisition with internal accruals and proceeds from its $350-million foreign-currency convertible
bond. The transaction values Taro's equity at $230 million, or $7.75 per share. The value is a 27% premium above Taro's May
18, 2007 closing price of $6.10 per share. Sun Pharma will refinance $224 million of Taro's net debt and grant Taro immediate
liquidity by providing the company with $45 million in interim financing.
Taro specializes in dermatological and topical products such as the "Ovide" lice treatment. The company also manufactures
cardiovascular, neuropsychiatric, and anti-inflammatory therapeutics. Taro's manufacturing sites produce topical creams and
ointments, liquids, capsules, and tablets. Sun believes Taro's production capabilities will complement its manufacturing and
development structure in the US. In addition, Taro manufactures active pharmaceutical ingredients (APIs), including steroids.
Sun is a specialty pharmaceutical company that manufactures branded generics. The company has product-development and process-chemistry
capabilities and manufactures APIs and dosage forms.
The all-cash deal is subject to the approval of Taro's shareholders and the relevant regulatory authorities.
-Erik Greb
COMPANY NOTE
Basel, Switzerland (May 29)—
Roche formed an agreement with two African manufacturing companies, Addis Pharmaceutical Factory in Ethiopia and Varichem
Pharmaceuticals in Zimbabwe, to transfer technology related to the manufacture of an HIV medication. The agreement is part
of Roche's Technology Transfer Initiative, which provides technical expertise and guidance for the processes to produce "Saquinavir,"
Roche's HIV medication. A team from Roche will work onsite at the manufacturing facilities in Africa and from the company's
headquarters in Switzerland to transfer the technology. The companies will be able to produce Saquinavir for Ethiopia, Zimbabwe,
and any other country within sub-Saharan Africa or defined as "least developed" by the United Nations.
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