Watson Pharmaceuticals has snapped up a fellow generics maker for $562 million as it aims to expand in Europe. Greece's Specifar, which comes in fifth in its home country's branded generics market, boasts about $120 million in annual sales--much of it off licensing deals in 36 countries, Reuters reports.
With more and more blockbuster drugs going off patent, the generics business is increasingly important, both to branded drugmakers looking to diversify and to generics specialists like Watson. And while pricing pressures in Europe have been plaguing branded drugmakers, the market for knockoff drugs there is expected to grow substantially.
Watson bought Arrow Group in 2009 to gain access to the European market, Reuters notes. With Specifar, it will broaden its reach beyond Arrow's operations, which were mostly concentrated in France and the UK. The Greek company has licensed products for marketing in key countries such as France, Germany, Italy and Spain. Some 70 percent of its revenue comes from outside of Greece, but Watson sees the Greek market as ripe for growth, because generics penetration there is quite low.
"Watson has a relatively small footprint in the European market, and we believe Specifar provides the company with a solid base to significantly expand," JPMorgan's Chris Schott said in a research note.
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