Mylan, Inc.’s (MYL) impending acquisition of Agila Specialties – the injectable drugs division of India’s Strides Arcolab – for $1.6 billion in cash moved a step towards closure with clearances from the India's Foreign Investment Promotion Board and the Cabinet Committee on Economic Affairs. Mylan intends to fund the deal through a $1 billion senior unsecured bridge term loan in addition to its available cash balance and existing lines of credit.
Through this deal, announced in Feb 2013, Mylan intends to strengthen its presence in the high potential generic injectables market. The deal is expected to close by year-end. At the time of announcing the deal, Mylan had stated that the deal should boost its 2013 adjusted earnings per share immediately after closure.
The global generic injectables market is highly lucrative and is expected to grow at a compound annual growth rate of 13% from 2011-2017 with many drugs losing patent protection. The addition of Agila should boost Mylan’s injectable generic portfolio significantly. The merged entity is expected to account for 70% of the market demand for injectables.
Mylan, one of the largest players in the global generics market, has a presence in more than 140 countries. As of Aug 22, 2013, the company had 179 Abbreviated New Drug Application (ANDAs) pending approval by the U.S. Food and Drug Administration, representing $84 billion in annual sales. These include 42 first-to-file opportunities, representing $23.8 billion in annual sales.
The data released by IMS Health is for the twelve-month period ending Dec. 31, 2012. The successful completion of the deal with Agila will boost these numbers significantly.
Mylan’s generic unit has seen quite a few launches over the past few months. One of the important recent launches includes the company's generic version of Pfizer Inc.’s (PFE) erectile dysfunction drug Viagra.
Mylan carries a Zacks Rank #3 (Hold). Actavis, Inc. (ACT) and Akorn, Inc. (AKRX) appear to be well placed in the generic space with a Zacks Rank #2 (Buy).
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