Actavis Inc, the generics pharmaceutical company, has announced its intention to purchase Warner Cholcott Plc, the specialty pharma company. The bid would be for US$5 billion in stock as an effort by the generics firm to grow its branded drug portfolio as well as decrease tax implications and increase revenues and profits.
The acquisition would bring forth two new business areas for the company, namely gastroenterology and dermatology. Aside from these major drug areas, there is also an additional women's health drug line such as contraceptives to Actavis, whose main line of business is manufacture of drugs that are beyond the specified time limit of patent protection.
With this purchase, the second major one in the past couple of years, Actavis would now be able to compete with larger generics firms such as Teva Pharmaceuticals and Mylan Inc.
On another front, Actavis recently declined a US$15 billion offer from Mylan as well as an interest offer from Valeant Pharmaceuticals has been placed on hold. With the purchase of Warner Chilcott, any chances of a takeover of Actavis would be either very slim to nil.
Actavis CEO said he would not comment on speculation when sought for a comment as Actavis selling itself. He announced the purchase through a conference call with analysts, saying the Warner Chilcott purchase was meant to be an expansionist and tax oriented move.
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