Endo to Acquire Par for $8 Billion, Increases Generics Footprint

Endo International has agreed to buy Par Pharmaceutical from private equity firm TPG for $8 billion in a deal the companies say will put them in the top five firms in the U.S. generics market.

Endo’s already rapidly growing generics business unit will be strengthened by Par’s portfolio of nearly 100 products — including oral solids, oral suspensions, injectables and high barrier-to-entry products — and a pipeline of more than 200 ANDAs, 115 of which were filed with the FDA as of Dec. 31, 2014.

Roughly 33 percent of the filed ANDAs are potential first-to-file or first-to-market opportunities and 75 percent of the overall development portfolio consists of Paragraph IV and first-to-file programs, Endo says.

The acquisition — announced Monday — represents a trend by relatively smaller companies such as Endo, Valeant and Actavis to grow through consolidation, says S&P Capital IQ analyst Jeffrey Loo. The companies, which completed tax inversions over the past couple of years, are taking advantage of much lower tax rates than U.S.-based companies.

“They get continued pricing power and leverage, the bigger they get,” Loo said.
Endo has made other purchases in the past couple of years, including acquiring Auxilium Pharmaceuticals for $2.6 billion last October, Dava Pharmaceuticals for $575 million in June and Boca Pharmacal for $225 million in August 2013.

The Endo-Par deal, which consists of $1.55 billion Endo shares and $6.5 billion in cash, is expected to close in the second half of this year. — Jonathon Shacat