Perrigo Needs Deal to Thwart Mylan
November 02, 2015 Perrigo needs deal to thwart Mylan Madeleine Armstrong Perrigo continues to resist Mylan’s overtures, but a deal is looking increasingly likely after its attempts to block the buy in court failed. Mylan has until November 13 to tempt Perrigo shareholders under Irish takeover rules. An acquisition of its own might now be the only hope for Perrigo in this buy-or-be-bought saga. But, with increasing consolidation in the speciality pharma space, the pool of potential targets is dwindling (see table below). The best option looks like Endo International, though its market cap of nearly $14bn might make it too big a bite for Perrigo, which has just $5bn in cash. But if Perrigo could pull it off it would gain a company with one of the best forecast growth rates in mid-tier pharma. Jazz Pharmaceuticals, Meda or Lundbeck could be easier to digest but the last, with faltering sales, might not be such an attractive proposition. Perrigo and its potential acquisition targets Company Based Market cap ($bn) 2014 sales ($m) 2020e sales ($m) CAGR Perrigo Ireland 23.1 815 1,388 +9% Endo International US 13.6 2,053 5,616 +18% Jazz Pharmaceuticals Ireland 8.4 1,163 2,151 +11 Lundbeck Denmark 5.9 2,222 1,974 -2% Meda Sweden 5.4 1,963 2,519 +4% Last line of defence Perrigo’s chief executive, Joseph Papa, is standing firm but the company’s share price closed down 5% at $157.74 on Friday, well off its 2015 high of $203.69 in April after Mylan formalised its bid (Mylan anti-chain action as good as confirms Teva interest, April 09, 2015).
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