Jul 28, 2015

TEVA ANNOUNCES SECOND ACQUISITION THIS YEAR WITH $40.5 BILLION ALLERGAN GENERICS DEAL

by Grant Goad

Teva Pharmaceuticals, the world’s largest producer of generic medicines, agreed this week to buy Irish drug maker Allergan’s generic drug business.

The deal is valued at $40.5 billion, with Allergan to receive $33.5 billion in cash and $6.75 billion in Teva shares; the stock represents a 10% ownership stake in the Israeli company for Allergan.

Teva will drop its recent hostile takeover bid for Netherlands-based drug company Mylan, freeing that company to pursue its own acquisition of over-the-counter drug maker Perrigo.

Allergan, famous for the anti-wrinkle treatment Botox, is expected to use the proceeds for M&A activity as well, with industry analysts speculating on targets including Biogen and Amgen.

The Teva-Allergan deal is the largest in Israel’s corporate history.

Teva Acquires  Auspex

Teva completed its acquisition of San Diego-based drug developer Auspex Pharmaceuticals in May, paying $101 per share for a total of $3.5 billion.

Auspex’s SD-809 is a deuterium-based analog of tetrabenazine (Xenazine), a treatment for chorea—involuntary bodily movements—caused by conditions such as Huntington’s disease, Tourette syndrome, and tardive dyskinesia.

Tetrabenazine has many side effects and requires frequent dosing, so it’s not often prescribed. Deuterium, however, is a stable hydrogen isotope and, when it is used to replace some hydrogen atoms in a molecule, the resulting bonds are stronger. SD-809 is therefore safer—the treatment lasts longer and can be prescribed in lower doses.

SD-809 has received two orphan drug designations from the FDA so far: for the treatment of Huntington’s disease in November 2014, and for the treatment of Tourette syndrome in the pediatric population (0–16 years of age) in May of this year .

(Read our recent post to learn more about orphan drug development and the FDA)

Auspex is also developing SD-560 for the treatment of pulmonary fibrosis, and SD 1077 as a potential treatment for Parkinson’s disease.