Now focused on integrating Allergan generics, Teva eyes 'much larger' specialty buy in 2017

SAN FRANCISCO--After watching months of pharma's M&A wave from the sidelines, Teva ($TEVA) finally made a splash this summer with an agreement to pick up Allergan's ($AGN) generics business. And it may not be finished in the dealmaking arena.

As CEO Erez Vigodman told listeners during a Monday session at the J.P. Morgan Healthcare Conference, down the line, Teva could "entertain a much larger transaction on the specialty front."

"I don't want to rule out the possibility that we might pursue larger deals going forward if the right ones show themselves," he said.

Teva CEO Erez Vigodman

Don't expect it to happen any time in the near future, though. If 2014 was for getting the company's "house in order" and 2015 was for transformation with the Allergan deal, than 2016 will be about assimilation and integration, Vigodman said. 2017 is the earliest he could see the company shifting gears and moving to "the next phase to the grand story of Teva"--and there is a next phase in that story, he assured investors.

For now, Teva is in the middle of preintegration planning with Allergan's generics team, which will come over after the companies close the $40.5 billion transaction they struck in July. The company has internally announced the top three layers of generics leadership, and it's "working very closely" with the FTC to identify what products it'll need to divest for antitrust reasons, generics CEO Siggi Olafsson said Monday.

Meanwhile, the Israeli pharma is negotiating with up to 5 potential buyers for those products, so it will "have the opportunity of moving quickly" when it gets word from the FTC, he said. Analysts have said one-time target Mylan ($MYL) could benefit from Teva's castoffs as it jettisons assets that could be worth up to $1 billion.

Special Reports: Top 10 generics makers by 2012 revenue - Teva - Actavis | Pharma's top 10 M&A deals of 2014 - Actavis/Allergan

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