By Peter Loftus
Generic-drug maker Mylan Inc. (MYL) is on the prowl for
acquisitions to bolster its product line and expand geographically,
and would consider deals valued at "well over" $4 billion, the
company's leader said Thursday.
"I think there are a number of acquisitions that would be
compelling and complementary to our existing platform," Chief
Executive Heather Bresch said in an interview after the company
reported improved sales and profit for the third quarter.
The generic-drug industry has undergone consolidation in recent
years, the latest example being Watson Pharmaceuticals Inc.'s (WPI)
agreement to acquire Actavis for about $5.5 billion. Intense
generic-drug pricing competition and other factors have convinced
generic companies of the need to bulk up, and to diversify into
nongeneric businesses such as branded, specialty drugs.
Ms. Bresch said Mylan's ability to generate strong free cash
flow has given the company "unprecedented financial flexibility,"
which can be put to use on deals.
She said Mylan might pursue acquisitions to expand its
specialty-drug division. The specialty division, whose flagship
product is the Epipen auto-injector treating severe allergic
reactions, sells branded products and accounts for about 13% of
total company revenue in the first nine months of this year.
"We have an opportunity to leverage that infrastructure here in
the U.S., and we're continuing to build that globally," she
said.
Mylan also would consider deals to widen its range of
drug-dosage forms, Ms. Bresch said. The company has a strong core
business of making solid, orally administered pills, but it would
consider using deals to expand into other dosage forms such as
those applied topically on the skin.
Mylan shares rose 94 cents, or 3.9%, to $24.88 in recent
trading.
Write to Peter Loftus at peter.loftus@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires