Stymied by Meda, deal-hungry Mylan could jump on Stada or Mallinckrodt

Pharma dealmakers are having a field day, but so far, Mylan ($MYL) has been standing on the sidelines, itching to jump into the game. As Bloomberg reports, the U.S.-based generics maker has been promising another deal this year to follow up on 2013's Agila Specialties buyout--but so far, no such luck.

The company has tried twice to buy Sweden's Meda. Rejected: Mylan's latest offer, a $6.7 billion-plus-debt assumption bid, fell flat at Meda headquarters this week. That's a tough deal to make; Meda's biggest shareholder is a family company that doesn't want to sell.

"Maybe there's just frankly no price that's good enough in order to get them to do a deal," Needham analyst Elliot Wilbur told the news service. "Meda is a nice acquisition that's complementary to Mylan's business, but there's a lot of other opportunities out there."

So, the company may well have to move on. As analysts tell Bloomberg, investors are expecting a deal, and Mylan's stock price has built in some of that expectation. Possibilities? Germany's Stada Arzneimittel, which had failed with a string of buyout attempts before announcing that it might have to sell itself instead. The company did wrap up an OTC deal last year, though, so it may not be as interested in becoming a target.

Then there is Jordan's Hikma Pharmaceuticals, which has had some recent struggles because of unrest in the Ukraine; its market cap is about $2.4 billion, Bloomberg says.

But Mallinckrodt ($MNK), the Dublin-based drugmaker spun off from Covidien ($COV) last year, may be Mylan's best bet, Piper Jaffray analysts said. The company agreed to buy Questcor Pharmaceuticals ($QCOR) and its H.P. Acthar Gel product earlier this month. Despite some controversy over Acthar's effectiveness and price, it would help diversify Mylan's offerings.

The fact is, with M&A so hot in biopharma these days, Mylan may need to make a buy to avoid becoming a target itself. "Mylan is probably the best generic company in the U.S. in terms of operating efficiency and its regulatory track record," Wilbur told Bloomberg. "That's an extremely attractive platform to someone who wants to become significantly larger and immediately obtain global scale in generics."

- see the Bloomberg story

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