The transaction will see Mylan acquire Abbott’s specialty and branded generics for non-US developed markets in exchange for 105m shares in the combined company, a 21% stake. Mylan’s closing share price on Friday, July 11 was $50.20.
The purchased assets comprise more than 100 generic drugs, in the therapeutic areas of cardio and metabolic, gastrointestinal, anti-infective and respiratory, central nervous system and pain, and women's and men's health. These include Creon, Influvac, Brufen, Amitiza and Androgel. Some of the drugs are still under patent; others are “hard-to-manufacture products with continued growth potential,” said Mylan.
The acquired business also has 2,000 sales representatives and two manufacturing facilities.
The generics giant said it expects the deal to provide it with financial firepower for future deals, an extra $600m of annual post-close EBITDA and $1.9bn in additional revenues at deal close, plus an improved global tax structure. The deal will allow a tax inversion, a practice which lets a company save money by moving its tax address.
Mylan predicted that following the transaction, the entire company would have $10bn in 2014 sales, adjusted EBITDA of approximately $3bn at transaction close, and 1,400 specialty and generic products.
The CEO commented that the newly acquired portfolio will complement Mylan’s existing generics, particularly its epinephrine auto-injector. “This enhanced commercial platform will help us drive the continued expansion of EpiPen Auto-Injector globally and enable us to more effectively launch important growth drivers, such as respiratory and biologics,” said Heather Bresch.
Abbott told investors in a conference call yesterday that it plans to sell its stake in Mylan’s new company and use the proceeds to acquire more products or buy back its shares. "While we have a very positive view toward Mylan stock, we do not expect to be a long-term shareholder in Mylan," said CEO Miles White.