Mylan reveals its $463M mystery buy, and it's Novartis' TOBI cystic fibrosis products

Mylan has already closed its $463 million buy of Novartis’ TOBI Podhaler and TOBI solution. (Mylan)

After hinting at a mystery purchase in its second-quarter earnings release, Mylan has finally pulled back the veil on what it bought.

The company has closed a $463 million buy of Novartis’ TOBI Podhaler and TOBI liquid, two cystic fibrosis products. The company expects to pay $240 million of that sum this year, it said.

The reason for the secrecy? “The transaction was subject to … pre-closing confidentiality restrictions,” Mylan said in a statement.


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Mylan alluded to the deal last month in its second-quarter earnings release, noting that it had struck the agreement at the end of July. But the move drew heat from Wells Fargo analyst David Maris, who chastised the company for its lack of transparency.

RELATED: Analyst chastises Mylan—not known for its transparency—for under-the-radar dealmaking

“We believe that investors should know more about the details of this deal, especially given its size,” he to clients at the time. “If it is accretive, it may mean that Mylan’s 2018 guidance lowering may be more conservative than anticipated,” he added.

Details on how the new therapies will benefit Mylan are still scant; the generics giant didn't offer forecasts, saying only that its new therapies would “further enhance Mylan’s respiratory portfolio in the U.S., Europe and certain Rest of World markets.” Novartis did not break out 2017 sales of the drugs in its most recent annual regulatory filing.

RELATED: FDA strikes down Mylan's generic Advair—again—citing 'minor' issues

Mylan’s respiratory unit could use some firepower in the absence of its anticipated generic of GlaxoSmithKline’s Advair, though. In June, the FDA handed the copy its second rejection, citing what Mylan called “minor deficiencies” in its application.

Analysts, though, are optimistic that the product can snag a regulatory OK by year’s end to become the first knockoff of the GSK blockbuster to hit the market. “Minor deficiencies are often very easily addressed,” Maris wrote at the time, though Leerink Partners’ Ami Fadia cautioned that “in the end, the bar for approval of generic respiratory inhalers remains a moving target and crossing the goal line remains difficult to reach.”

Meanwhile, Novartis has been busy casting off non-core assets so far in 2018. Earlier in the year, it agreed to hand over its share of its GlaxoSmithKline consumer health JV to its British partner for $13 billion, and Thursday, its Sandoz generics arm struck a pact to unload about 300 U.S. generics to India's Aurobindo for $1 billion.

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