|Teva CEO Erez Vigodman|
Hold it right there, Mylan: Teva ($TEVA) said in a Wednesday letter to that company's executive chairman. A couple days after receiving a scathing rejection to its $40 billion buyout bid, the Israeli drugmaker has a few things it wants to set straight.
Responding to Mylan ($MYL) Chairman Robert Coury, CEO Erez Vigodman set out to debunk some of Mylan's claims--including that antitrust hurdles and "different and conflicting cultures" would thwart any potential deal, and that "the old Teva"--one plagued by underperforming stock and tumult in its higher ranks--"is very much still alive."
"Your letter paints a fundamentally distorted picture of Teva and ignores its rich heritage, unique culture, industry-leading achievements and contributions that have benefited patients and healthcare systems worldwide," Vigodman wrote.
First off, Coury "considerably overstate[s]" the regulatory challenges to a Teva-Mylan combo, Vigodman said. As he pointed out, most of the two drugmakers' products don't overlap, and those that do have other competitors, too. Teva is confident it can get around any problems that come up--and meet the very 7-month deal-closing window Mylan has promised in its three dismissed offers for Perrigo ($PRGO).
|Mylan Chairman Robert Coury|
Vigodman also called Coury's reference to a cultural clash "puzzling," pointing to Teva's integration experience. His company's leadership team is "respectful of an acquired company's heritage and is focused on preserving each organization's core strengths, competencies and talent," Vigodman contends. And that includes Mylan, he stressed, urging the company to engage in "productive negotiations" and "constructive, good faith dialogue."
While it remains to be seen whether the olive branch impressed Coury, it did catch the attention of analysts, including Oppenheimer's Akiva Felt. He described Vigodman's letter as "classy"--in other words, "exactly the kind of image that the new Teva needs to establish."
"Teva's willingness to take the high road signals to us that the company is much more committed to pursuing the deal than we thought previously," Felt wrote in a Wednesday note to investors.
Meanwhile, Teva got a boost on the earnings front Thursday, delivering a better-than-expected profit tally for Q1. Both non-GAAP earnings of $1.36 and revenue of $5 billion topped Wall Street's expectations, leading the Petah Tikva-based company to up its full-year profit expectations. It now expects non-GAAP EPS to hit between $5.05 and $5.35, a revision to its earlier prediction of $5.00 to $5.30.
- read Teva's letter
- see the Q1 results
Special Reports: Top 10 generics makers by 2012 revenue - Mylan - Teva | Pharma's top 10 M&A deals of 2014