Teva Acquires Allergan’s Generics Unit for $40.5 Billion

Teva is paying $40.5 billion to acquire drugmaker Allergan's generic division, walking away from efforts to purchase Mylan for a similar amount.

The Israeli drugmaker offered $33.75 billion in cash and less than 10 percent of stock shares valued at $6.75 billion. The deal, announced last week, is expected to close in the first quarter of 2016.

With the purchase, Teva claims it will have the most advanced research and development capabilities in the generics industry — with about 320 pending ANDAs in the U.S., including about 110 first-to-file pending ANDAs. Allergan will retain 50 percent of Teva’s future earnings from its generic Revlimid (lenalidomide) and will retain its biosmilar development programs.

The news follows Allergan’s announcement Sunday that it is purchasing Naurex for $560 million. The clinical-stage biopharma company developed Rapastinel (GLYX-13), a once-weekly intravenous molecule that showed sustained efficacy in treating depression in phase 2 clinical trials. Allergan will also get Naurex’s developmental-stage NRX-1074, which showed efficacy against depression in an initial single-dose Phase 2 study.

The Naurex deal follows a series of purchases by Allergan, including $250 million to acquire the rights to two of Merck’s antagonists for use against migraines and $125 million for dry eye disease devicemaker Oculeve in July, and the acquisition of double-chin and male-pattern baldness drugmaker Kythera Biopharmaceuticals for $2.1 billion in June.

In announcing withdrawal of its proposal to acquire Mylan, Teva said it will review its options regarding ownership of about 4.6 percent of Mylan common stock. Teva began purchasing the stock after Mylan leaders challenged its $43 billion bid for the company in April.

Mylan’s continues to pursue a hostile bid for Irish drugmaker Perrigo. — John Bechtel