Actavis' Acquisitio?n of Forest Laboratori?es Will Expand its Branded Drug Portfolio and Facilitate Long-Term Growth
Actavis’ recent acquisition of Forest Laboratories highlights the company’s desire to increase its branded drug portfolio alongside its generic drug business, which could ultimately provide a strong platform for the firm to achieve long-term growth in the innovative pharmaceutical space, says an analyst with research and consulting firm GlobalData.
Actavis, one of the world’s leading generic drug manufacturers, has agreed to buy Forest Laboratories for $25 billion. According to Joshua Owide, GlobalData’s Director of Healthcare Industry Dynamics, this is the largest-witnessed deal in the pharma industry for a number of years, exceeding the $20 billion paid by Sanofi for Genzyme in 2011.
As recently as December 2013, Forest was rumored to be an acquisition target for UK pharma giant AstraZeneca, but the $15 billion valuation fell short of the expectations of Forest’s major shareholders. By the time Actavis’ acquisition announcement was made, Forest’s stock market valuation reached around $20 billion.
Owide says: “This is still well below the price offered by Actavis and indicates trends currently seen across the entire pharmaceutical industry, whereby the demand for assets often exceeds the perceived value of those assets, leading to premium deal prices being commanded by shareholders.”
GlobalData believes that Actavis can benefit financially as a result of this integration, through means including economies of scale and tax savings. This is due to Actavis being headquartered in Ireland, where tax rates are significantly lower than in the US, which is home to Forest. The tax savings alone could be worth as much as $4 billion, which could justify the lofty price of the deal.
Actavis will also seize control of a number of Forest Laboratories’ emerging therapeutics, which GlobalData forecasts will become successful over the coming years. Among these drugs is Linzess (linaclotide), recently launched for irritable bowel syndrome, which could reach sales of more than $1 billion by 2017.
Additionally, Forest’s therapies Tudorza (aclidinium bromide inhalation powder) and Daliresp (roflumilast) have both gained approval for obstructive pulmonary disease, and are forecast to achieve combined sales of over $1 billion by 2018.
“A large proportion of Forest’s $25 billion valuation is attributed to the future earnings of its emerging portfolio, a scenario which carries both significant risk and reward to Actavis,” Owide concludes.
Related News
-
News Patients vs Pharma – who will the Inflation Reduction Act affect the most?
The Inflation Reduction Act brought in by the Biden administration in 2022 aims to give better and more equitable access to healthcare in the USA. However, pharma companies are now concerned about the other potential costs of such legislation. -
News CPHI Podcast Series: What does the changing US Pharma market mean for industry and patients alike?
In this week's episode of the CPHI Podcast Series Lucy Chard, Digital Editor for CPHI Online is joined by James Manser to discuss the political and market changes in the US pharma field. -
News CPHI Barcelona Annual Report illuminates industry trends for 2024
The CPHI Annual Survey comes into it’s 7th year to report on the predicted trends for 2024. Over 250 pharma executives were asked 35 questions, with their answers informing the industry landscape for the next year, spanning all major pharma marke... -
News Which 10 drugs are open to price negotiation with Medicare in the USA?
The Centres for Medicare & Medicaid Services, under the Biden administration in the USA, has released a list of the 10 drugs that will be open to price negotiations as part of the new legislation under the Inflation Reduction Act (IRA). -
News EU Medical Devices Regulation causes unintended disappearances of medical devices for children, doctors state
Doctor groups and associations have appealed to the EU to correct the EU Medical Devices Regulation law that may cause unintended shortages of essential drug and medical devices for children and rare disease patients. -
News 10 Major Drug Approvals So Far in 2023
Last year, 37 novel drugs were approved by the FDA, this was a high number for such a category, and covered many fields including oncology, demonstrating how promising further research is, and how it is only continuing to build. To date, there are alre... -
News Detecting Alzheimer's disease with a simple lateral flow test
A novel rapid diagnostic test for early-stage Alzheimer's disease has been developed using a biomarker binder from Aptamer Group along with technology from Neuro-Bio, the neurodegenerative disease experts. -
News CPHI Podcast Series: outsourcing and manufacturing trends
Listen to the CPHI Podcast Series this June to hear Gil Roth of the PBOA speak with Digital Editor Lucy Chard about the biggest trends and topics to watch in pharma outsourcing and manufacturing at the minute.
Position your company at the heart of the global Pharma industry with a CPHI Online membership
-
Your products and solutions visible to thousands of visitors within the largest Pharma marketplace
-
Generate high-quality, engaged leads for your business, all year round
-
Promote your business as the industry’s thought-leader by hosting your reports, brochures and videos within your profile
-
Your company’s profile boosted at all participating CPHI events
-
An easy-to-use platform with a detailed dashboard showing your leads and performance