To avoid becoming deal bait, Mylan CEO may have to make another big buy

Mylan CEO Heather Bresch

It's been less than a week since Mylan ($MYL) completed its deal with Abbott ($ABT), scooping up a large chunk of the Illinois company's overseas generics business. But CEO Heather Bresch is already hinting at another big transaction.

Speaking on the company's fourth-quarter earnings call, Bresch mentioned the possibility of another "material transaction" by the end of 2015, Reuters reports. Added borrowing capacity will help it get there, with the Abbott deal reducing Mylan's debt-to-earnings ratio, Bernstein analyst Ronny Gal wrote in a Tuesday note to investors.

Such a transaction would build on the $7.72 billion in revenue the Pennsylvania drugmaker raked in last year. That's a boost Mylan could use as it vies for positioning in the generics industry. Rival Teva ($TEVA) swears generics deals are on the way, and Actavis ($ACT), a former midsize rival, leaped into the ranks of Big Pharma with last year's $65 billion deal for Allergan ($AGN).

But another acquisition isn't critical to growth, Mylan said on Tuesday. It expects to expand revenues to between $9.6 billion and $10.1 billion this year, with Lidoderm and Copaxone copies--which Gal expects to see in Q3 and Q4, respectively--chipping in to that haul.

On the other side of the coin, that growth could make Mylan an attractive takeover target itself. Rumors have already been swirling that it could make a prime pickup for companies on the prowl for deals, such as Teva and Pfizer ($PFE).

Some analysts, though, are skeptical that buyers would go after Bresch's company, despite the tax-friendly domicile it's enjoying in the wake of the Abbott buy. Bernstein's Tim Anderson, for one, wrote in December that Mylan would be too small to help Pfizer do its own tax-advantaged inversion deal. As for Teva, Mylan--with a market cap of more than $21 billion--may be too big for the Israeli drugmaker to swallow.

- read Mylan's release
- get more from Reuters

Special Reports: Pharma's top 10 M&A deals of 2014 - Mylan/Abbott Laboratories established products | Top 10 generics makers by 2012 revenue - Mylan | 20 Highest-Paid Biopharma CEOs of 2012 - Heather Bresch - Mylan