Skip to content
Link copied to clipboard

Teva completes acquisition of Barr

The $9 billion acquisition will boost revenue, market share.

Bill Marth, a Teva official, said the combined firm would have about 16%of the U.S. market.
Bill Marth, a Teva official, said the combined firm would have about 16%of the U.S. market.Read more

Quick - name the pharmaceutical company that makes more pills than any other U.S. firm, has the ear of President-elect Barack Obama, and yesterday completed a $9 billion acquisition.

A hint: It employs 1,600 people in Pennsylvania, and its name probably brings to mind sandals, not drugs.

Answer: Teva Pharmaceutical Industries Ltd., whose North American headquarters are in North Wales. That the Israeli company is not a household name like Pfizer Inc. or Merck & Co. Inc. speaks to its primary business, generic drugs. It also develops its own drugs, though it does not make Teva sandals.

Teva Pharmaceutical mostly makes copycats of other companies' products that have lost patent protection, so consumers who take its drugs are not bombarded with marketing and advertising.

But Teva has grown quickly by aggressively pushing to be the first to get rights to sell generic versions of drugs and by acquiring rivals. Teva completed a previously announced acquisition of rival Barr Pharmaceuticals Inc., which is based in Montvale, N.J., and employs about 70 people in Bala Cynwyd.

The deal gives Teva a stronger position in the market for generic oral contraceptives. Barr makes Ocella, a generic version of Bayer Inc.'s contraceptive, Yasmin. Through the 12 months ended Sept. 30, the two companies reported $13.6 billion in revenue. Teva told analysts recently that it expected to report $20 billion in revenue by 2012.

Bill Marth, chief executive officer of Teva North America, said the combined company would have about 16 percent of the U.S. pharmaceutical market, as measured by prescriptions written.

Marth said the two companies expected to cut about $300 million in costs over three years. Some of that likely will come through job reductions. Teva employs 6,050 people in North America and about 29,000 worldwide; it will have about 37,000 as a result of acquiring Barr.

Marth said it was too early to say how many jobs would be cut, but he noted that Teva's employment grew about 3,000 after its merger with Ivax Corp.

Marth said Teva employees had met recently with Tom Daschle, Obama's choice for secretary of health and human services, to discuss the future of the pharmaceutical industry.

"They are very interested in increasing access" to health care, Marth said, "and the generic industry is all about access. We think generics are really the answer there." Generic drugs generally cost pennies on the dollar compared with brand-name drugs.

Marth also said he was hopeful the Obama administration would allow an approval process for generic biologic drugs, which are made from living organisms and are more complicated to replicate and manufacture than traditional pills, which are made from chemicals.

The generic and branded industries have been arguing over how much exclusivity patented drugs should be allowed. Marth said he believed there was a good chance that biogeneric legislation would be passed next year.