Mylan may soon find itself wrestling former target Perrigo for deals

Mylan Chairman Robert Coury

Earlier this month, Perrigo ($PRGO) shareholders spurned a hostile buyout attempt from Mylan ($MYL). And now, the Netherlands-based company may have to go up against its former target if it wants to pursue a replacement buy.

The companies could find themselves sparring over drugmakers like California's Impax Labs ($IPXL), Germany's Stada or Israel's Taro, Bloomberg Intelligence analyst Elizabeth Krutoholow told Bloomberg. And for Mylan, which has now been rejected by its past two targets--Perrigo and Sweden's Meda before it--the stakes are high.

"They don't have a lot of confidence from investors right now," Krutoholow said. "They can't afford to lose on their next bid."

The way some analysts see it, though, Mylan's failure to snag Perrigo was a good thing for the drugmaker, even if it'll now face some heated competition in the M&A arena.

"We believe Mylan was overpaying for Perrigo and the long-term value of the merger was suspect, in our view," Bernstein analyst Ronny Gal wrote in a recent note to clients, pointing out that the company could potentially go after Sanofi's ($SNY) newly on-the-block generics business or Pfizer's ($PFE) established products, should the pharma giant split into two following the close of its $160 billion merger with Allergan ($AGN).

Perrigo CEO Joseph Papa

Both of those options come along with "lower risk and likely better returns, in our view," he wrote.

Mylan may also find opportunity in Allergan's proposed $40.5-billion-dollar pact to sell its generics unit to Teva ($TEVA), Nexthera Capital's Chief Investment Officer, Ori Hershkovitz, told the news service. That tie-up will require the drugmakers to jettison some assets to clear antitrust hurdles, and Mylan may be able to pounce on them.

Perrigo CEO Joseph Papa, for his part has said the OTC specialist would be eyeing "consumer-facing assets." And the company wasted no time striking a deal after freeing itself from Mylan's grasp: Earlier this week, it announced a $380 million agreement to buy the U.S. rights to AstraZeneca's ($AZN) Entocort, as well as an authorized generic that's been marketed by Par Pharmaceuticals.

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