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Teva Acquires Cephalon - New Leap of Teva into Branded Business, Niche Therapeutic Areas and Specialty Pharma

The World's largest generic maker, Teva announced its acquisition of Cephalon, one of the world's fastest-growing biopharmaceutical companies with more than 170 products in nearly 100 countries.

According to the deal, Teva gets hold of Cephalon's total enterprise value of
approximately $6.8 billion. The transaction is expected to be completed in the third quarter of this financial year. However, this merger is expected to have an immediate impact on increase in the Teva's non-GAAP earnings per share and GAAP earnings by the end of the fourth quarter.

This merger of Cephalon with Teva is expected to strengthen Teva's long term strategy by penetrating into branded market and specialty pharma. With this acquisition, Teva will be able to expand into new therapeutic segments like CNS, oncology and pain management. Teva is set to utilize the highly complementary commercial, R&D and operational capabilities of Cephalon, while Cephalon is expected to gain by expanding its products worldwide and pursuing innovative therapies under Teva's commitment to R&D and strong pipeline.

The combined company is expected to have a branded portfolio worth approximately $7 billion in sales and the strong pipeline would also make Teva well positioned in the market. There will be more than 30 late-stage molecules in this combined company with a long patent life which are anticipated to amplify the opportunities in the future. Teva is positioned to double its revenues from branded drugs from $4.6 billion in 2010 to over $9 billion in 2015.

Mepha, a prominent Swiss-based generic pharmaceutical company which was acquired by Cephalon on April 09, 2010, is expected to enhance Teva's generic business in high growth emerging markets. Mepha has its presence in CEE, Africa and Latin America.

Source: GBI Research
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