Leaders in Pharmaceutical Business Intelligence (LPBI) Group

Re-Creation of the Big Pharma Model via Transformational Deals for Accelerating Innovations: Licensing vs In-house inventions

Reporter: Aviva Lev-Ari, PhD, RN

For investors in the generic business, this may be a bit of a warning that stock prices are getting too heady. Saunders (I spoke to him between meetings this morning, as he went on just an hour of sleep) says he expects Teva stock to rise over the long-term, and thinks that the deal for Allergan will improve as that happens. But he also agrees that he’s getting an amazing multiple, and says that two factors led him to the “bittersweet” decision to sell: the great price, and the fact that consolidation among drug purchasers (CVS, Walgreens) and insurers (Aetna buying Humana, Anthem buying Cigna) led Saunders and Bisarro to realize that they had to either bulk up or get out. And they didn’t want to bulk up. Investors in Mylan Pharmaceuticals, which spurned Teva’s advances: Beware.

Saunders is obviously game. One thing that distinguishes him from Valeant billionaire Michael Pearson, the drug industry’s other great consolidator, is that Saunders comes to this from a different place. A decade ago, it looked like he was being groomed by Hassan to potentially take over Schering-Plough before that company ran into problems and got bought by Merck. Unlike Pearson, he’s not looking so much to dismantle the big pharma model as to re-create it.

SOURCE

http://www.forbes.com/sites/matthewherper/2015/07/27/allergan-pharmas-biggest-dealmaker-is-on-the-hunt-again/?utm_medium=email&utm_campaign=Daily%20Digest%20Send%20Control%202015-07-27&utm_source=Sailthru&utm_term=Daily%20Digest%20Horizon%20Control