Teva comes out on top with $5B Ratiopharm bid

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And the winner is... Teva. This morning, the generics giant announced that it was buying Ratiopharm for just under $5 billion, beating out Pfizer and Actavis for the German company. Ratiopharm is Germany's second largest generics producer and the sixth largest generic drug company worldwide. And the Ratiopharm purchase marks the biggest takeover in the generic drugs market since Teva bought Barr Pharmaceuticals for $7.46 billion in 2008, the Wall Street Journal notes. The company expects to close the deal by the end of this year.

The combined entity will hold the leading market position in 10 European markets, including the U.K., Hungary, Italy, Spain, Portugal and the Netherlands, as well as a top three ranking in 17 countries, including Germany, Poland, France and the Czech Republic. Teva also expects its sales to nearly double in Canada as a result of the deal. Shlomo Yanai, Teva's president and CEO, said during an investors call that the acquisition was key component in its 2015 strategy. By that time, the company expects $31 billion in revenue and $6.8 billion in net income.

Company officials also said that the buyout will complement the acquisition (through Barr) of Croatian drugmaker Pliva, through which Teva gained a toehold in the Balkan, Eastern European and Balkan markets. With Ratiopharm, Teva will be well positioned in Western and Central Europe.

Ratiopharm also will help Teva with it biosimilars know-how, as it already sells a number of generic biologics in Europe, Yanai said during the call. Teva has taken steps over the last year to position itself as a major player in the biosimilars game--despite the lack of a regulatory pathway in the U.S. It inked a deal with Lonza Group in January 2009 to establish a joint venture to develop, manufacture and market a portfolio of biosimilars. And in December, it submitted a BLA for XM02, which was principally developed as a similar biological medicinal product to Amgen's Neupogen.

Pfizer had been very interested in Ratiopharm, but wasn't prepared to put significantly more than €3 billion on the table, according to the Wall Street Journal, citing sources. But don't count the pharma giant out of the European and German generics game yet. Sources say that Pfizer might cast its eye on Stada, another German generics maker. Stada's stock shot up 2 percent to an 18-month high after news of the Teva-Ratiopharm deal broke, according to Reuters.

- read Teva's release
- check out the WSJ coverage
- see the Reuters report

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