It's not just Big Pharma that's eyeing international expansion. Generics maker Watson Pharmaceuticals has agreed to buy Arrow Group, another maker of copycat meds with tentacles in more than 20 countries. The price: $1.75 billion. The result: A combined company with annual revenues of more than $3 billion. The payoff: Watson predicts the deal will increase earnings next year.
The fact that Watson made such a deal is no surprise to anyone who's been paying attention. CEO Paul Bisaro has been proclaiming the company's need for an acquisition. "This deal is in line with the expectations that the company has set for investors," Collins Stewart analyst Louise Chen told Reuters. "They said they would do an international deal and that it would be accretive quickly."
In a statement, Bisaro emphasized Arrow's global reach, including a manufacturing network with plants in Malta, Brazil and Canada. The deal will help Watson "expand our global footprint and leverage our assets across many developed and emerging markets around the world," he said. Watson will be able to tap Arrow's infrastructure to push its own products into new regions.
Plus Arrow has exclusive rights for several new generics, including ... (drum roll, please) ... the U.S. rights to launch an authorized version of Pfizer's anti-cholesterol blockbuster Lipitor, in November 2011. Arrow also boasts exclusive rights to launch a generic version of Sepracor's Xopenex asthma drug in 2012, and Watson will take over Arrow's patent challenge on AstraZeneca's asthma med Pulmicort.
- read the release from Watson
- see the news from Reuters