Moneycontrol Bureau
When Teva Pharmaceuticals Industries made an unsolicitated offer to buy out Mylan for USD 40 billion in cash and stock, it ruffled shareholders of Natco Pharma a little. Natco had teamed up with Mylan to challenge the validity of Teva’s patented 20 mg dosage version of Copaxone in US courts. The agreement between Natco and Mylan states the two would collaborate to market and distribute Copaxone worldwide.
Copaxone is used to treat patients with remitting relapsing multiple sclerosis (RRMS).
Teva's patent on Copaxone, which accounts for 50 percent of its profits through sales of USD 4 billion a year, is due to expire in September. If Teva acquires Mylan, it will help Teva offset revenues lost to patent expiration of Copaxone. Brokerages say if the merger happens, Natco may have to exit its partnership with Mylan and scout for a new one.
However, Vikas Dandekar, India Bureau Chief, pharmasianews.com suggested the deal is not something for which Natco Pharma investors should worry because the US Supreme Court has still not given its decisive verdict, though the approvals have come. Speaking to CNBC-TV18, he said even if Natco needs to find a new partner, it will stand to benefit because the generic will still have a lot of potential in terms of margins and profitability. Net-net the deal is neutral for Natco investors, with leaning towards positive. "Definitely it doesn’t look like a negative," he said.
Meanwhile, Natco investors can take comfort from the fact that it has a lot of products in the pipeline including one from Celgene called Revlimid which will come out in the next couple of years.
The Teva-Mylan-Perrigo Triangle
Israel-based Teva has offered to pay USD 82 a share, a 20 percent premium to Mylan's stock price on Monday. At the moment Teva and Mylan are world’s two biggest generic specialists and if the merger takes place, it would give birth to world's biggest pharmaceutical company by sales.
While proposing to Mylan late on Tuesday, Teva said the companies are "natural fit" but Mylan CEO Robert Coury said it will oppose all efforts to ward off the offer.
Interestingly, Mylan also made an offer to take over rival Perrigo for USD 29 billion the same day as Teva. But Teva tried to impress Mylan shareholders by saying a sale to Teva would be far better deal for them than taking over Perrigo.
By Jhini Sinha Phira
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