Teva to Make "Substantial Return on Investment" on Allergan Deal

Teva is "well positioned to make a substantial return on investment on its purchase of Allergan’s generics business for $40.5 billion, commented GlobalData deals analyst Gianfranco Zeppetelli. “The transaction will serve to offset Teva’s forthcoming revenue shortfall from generic entry to Copaxone (glatiramer acetate), its flagship multiple sclerosis treatment and primary sales generator."

Zeppetelli added that the deal "will allow Allergan to concentrate on its innovative pharmaceutical business, which boasts higher profit margins than generics. Additionally, Allergan will use the capital raised in the deal to reduce its debt accrued from recent M&A exploits and seek further acquisitions, with Biogen rumored to be high on the list of potential targets.”

Following Actavis’ purchase of the Botox maker in March for $70 billion, the former officially changed its name to Allergan, under which its branded portfolio will be positioned. The company has since made some strategic bolt-on acquisitions by signing deals for Kythera BioPharma and Naurex, with both deals complementing Allergan’s therapeutic focus around the central nervous system and dermatology, said Zeppetelli.